NEW DELHI: Hindustan Motors, which is bidding to make engines for Ford's Ikon car, is also eyeing making powertrains for other foreign vehicle makers with assembly plants in India. One of India's oldest car companies, Hindustan Motors makes products like the 1950s-vintage Ambassador car, the Lancer sedan in collaboration with Japan's Mitsubishi Motor Corp and the Trekker and RTV utility vehicles.
Its Pithampur plant in Madhya Pradesh already makes powertrains -- engines and gear boxes -- for the Ambassador, Mitsubishi Lancer and the RTV utility vehicle. "Now we have decided that we will redefine our business, that we are (also) a powertrain manufacturer. It could be for anyone," B.K. Chaturvedi, president and executive director of Hindustan Motors told Reuters in an interview.
Foreign vehicle makers including General Motors Corp, Toyota Motor Co, Honda Motor Co Ltd and Fiat currently import engines for the vehicles they assemble in India, Chaturvedi said. "They can continue to import, they can put in their own facilities and the third option is to outsource. So if they opt for the third option, then we would like to pitch for it," he said.
Hindustan Motors was a car market leader until the mid-1980s but has since been marginalised by the entry of foreign auto companies making smaller, cheaper and more contemporary cars. The money-losing vehicle maker had only a 3.3 percent share of the domestic market in the half year to September and now sees itself more as a maker of low-volume niche products. Early next year, it will launch the Mitsubishi Pajero.
OUTSOURCING IS INCREASING
Automakers the world over are increasingly outsourcing vehicle assemblies and parts to keeps costs low and encourage specialisation, Chaturvedi said. In India, General Motors makes the German-engineered Opel Corsa and Astra in India, Toyota the Qualis utility vehicle, Honda the City and Accord sedans and Fiat the Palio and Siena. All of them, including Ford, have entered India over the last five years and are vying for a share of the about 725,000-a-year domestic car and utility vehicles market that is projected to grow at about five to 10 percent a year over the next decade.
Chaturvedi said Ford has spoken to HM about making 50,000 engines to start and using the Pithampur plant as a global hub for a family of engines. The number of engines to be made would be increased gradually over time, he added. A Ford official told Reuters earlier this month the company expected to take a decision on a local maker for the Ikon engine by the end of 2001.
"I am hopeful (that they will pick Hindustan Motors)...I feel that our facility is very high quality and we should be able to offer them what they need," Chaturvedi said.
