Kolkata, Aug 10 (IANS) Loss-making car-maker Hindustan Motors expects a turnaround by the end of current fiscal (2010-11) by increasing production of Ambassador cars, launch of new variants and operations restructuring, a top official said here Tuesday.
‘With these initiatives, it is expected that our businesses will become profitable by end of the current financial year,’ chairman C.K. Birla told shareholders during the annual general meeting of the company.
It had informed the National Stock Exchange in May that the company would report to the Board for Industrial and Financial Reconstruction (BIFR) following more than 50 percent erosion of its net worth.
‘We would also like to inform that the accumulated losses of the company at the end of financial year March 31, 2010 have resulted in erosion of more than 50 percent of its peak net worth during the immediately preceding four financial years,’ the company said in May.
With the adoption of 2010-11 accounts at the annual general meeting, Hindustan Motors would now have to report to BIFR about erosion of net worth as required under the Sick Industrial Companies (Special Provisions) Act, 1985.
Mitsubishi vehicles sales are expected to revive during the current year. Mitsubishi vehicles built with imported kits suffered during 2009-10 due to upward revision of prices on foreign exchange fluctuations.
‘We are experiencing good demand for the new Outlander SUV variant from the Mitsubishi stable launched in January and plan to gear up production during the year to capitalise on the demand,’ Birla said.
Japan’s Mitsubishi Motors Corporation manufactures its sport utility vehicles (SUV) like Lancer, Cedia, Pajero and Outlander models at Hindustan Motors’s Chennai plant under a technical tie-up.
Manoj Jha, the company’s managing director, said demand for the iconic Ambassadors are increasing. To cater to the rising demand, it plans to ramp up capacity at its Uttarpara plant in West Bengal from the present 10,000 vehicles a year to about 15,000 vehicles by March.
The company started production of the mini-truck in collaboration with Shifeng of China at the Uttarpara plant in 2008. It also plans to ramp up the production of Shifeng from the current level of 250-300 vehicles a month.
‘After a pilot run of the vehicles across different parts of the country, we have gone for some changes in design and are now ready to go for volume production in October,’ Birla said.
C.K. Birla group’s Chief Finance Officer T.E.S. Varadhan said the company posted Rs.19.73 crore loss in the first quarter (April-June) of the current fiscal (2010-11) against Rs.21.81 crore in the like period last year.
The loss is seen coming down in the July-September period as the company is in talks to sell a real estate property in Chennai for about Rs.25 crore, he said.
