Hindustan Motors will, in a bid to save itself from heavy losses, handover the possession of its Chennai manufacturing facility to a separate entity - Hindustan Motor Finance Corporation.
The company has kickstarted the process for this, seeking approvals from investors and the Tamil Nadu government. Earlier this year, the company's shareholders in a meeting in Kolkata had given their nod to sell or lease the manufacturing facility in order to raise Rs 150 crore. It was also revealed that Mitsubishi was not interested in buying the plant for that amount.
The plant just outside Chennai assembles the Mitsubishi Pajero Sport out of CKD kits and helps Isuzu contract manufacture the MU-7 and D-Max utility vehicles.
Hindustan Motors' other facility in Uttarpura in West Bengal manufactures the Ambassador, sales of which have been down for a long time now. In a bid to join the hot sub-4meter segment, Hindustan Motors had recently announced that it would launch a sub-4meter version of the Ambassador in the 2014-2015 fiscal year.
The company also recently launched the Ambassador Encore at Rs 4.98 lakh. At the time of its launch, the company said that the car had garnered 400 bookings and an optimistic CEO, Uttam Bose, had said that the company targets 2,000 units to be sold each month.
[Source - The Times of India]