Source: The Hindu: Aug 11,2010:Special Correspondent
KOLKATA: Even as it readied itself for an intimation to the Board for Industrial and Financial Reconstruction (BIFR) on erosion of over half of its net-worth, India's oldest car manufacturer, the C. K. Birla-controlled Hindustan Motors, is looking at launching a restyled version of its iconic car, the Ambassador.
The company's Managing Director Manoj Jha said here at a pressmeet that the new cars would include a ‘definite upgrade' and would be ready within a year. He hinted that overseas companies were engaged in the technical parts and a holistic change would be effected. “We are not looking at the volume-market but rather the niche-segment — for people who love the retro look.”
Expressing confidence that around 12,000 units of the new-look Ambassador could be sold in a full year (as an entry-level sedan), he said that the company had changed its approach to aggressive marketing and product-development and proposed to appoint 50 new dealers. “We are also taking the initiative to ensure that the cars are available on-demand, for which we are implementing a build-to-stock strategy with dealers being given targets,” he said.
Earlier Chairman C. K. Birla told the shareholders that the company made a Rs. 51.10-crore loss in 2009-10. The main reasons were the adverse movement in foreign exchange rates and the higher proportion of Ambassador for the taxi-segment which had low-margins.
Cost reduction initiatives and profit from sale of land at the mother plant at Uttarpara here could only partly absorb the impact.
Sales of Mitsubishi range of products from the Chennai car-plant dropped, mainly due to adverse movement in forex rates forcing the company to increase prices. The Lancer and the Cedia are facing stiff competition and volumes have declined in the wake of global economic slowdown, despite introduction of new models.
Mr. Birla said that although a desired ramp-up of the component business could not take place, this segment would grow to be a major contributor to the company's future profitability.
The company has completed the transfer of 314 acres at Uttarpara on which an integrated township and an auto ancillary park will come up.
The company has shown an improvement in the first quarter bottom line this fiscal and hoped to turnaround by this fiscal. Accumulated losses stood at Rs. 132.30 crore.
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