MITSUBUSHI LANCER

According to the JD Power Asia Pacific 2000 India Initial Quality Study (IQS), Hindustan Motor's Mitsubishi Lancer is the best premium mid-size car on the Indian roads. Lancer, by registering just 84 defects per 100 vehicles, is well below the industry average for the mid-size premium segment - 119 problems per hundred vehicles.

At a recent press conference, B.K.Chaturvedi, President, Hindustan Motors and G.Shyam Sunder, Vice-President, Hindustan Motors, outlined HM Lancer's future plans.

Currently the Lancer enjoys a 40% market share in the mid-size premium segment. We are selling around 8,500 cars right now. We need to sell around 11,000 cars to break-even. To achieve this, the company has widened its dealership network.

We have found that, with increased localisation, our quality has improved. The Lancer right now, has a local content of 56%, which we are planning to increase to 60% by March 2001, and to 70% by March 2002. We are taking one step at a time, the critical issue being, how well we can achieve quality localisation.

We have an understanding with Mitsubishi, which allows us to sell in certain markets like Sri Lanka and Bangladesh.

There can be no variant to the Lancer. There may be cars that belong to a different category all-together.

Mitubishi is deeply involved with Lancer. However, they have no interest in a 100% ownership. Their interest is more in technical assistance than equity participation.

We are planning to manufacture Mitsubishi's Pajero at Hindustan Motor's, Tiruvallur facility. A dip-stick study has been conducted. And the study shows that there is a strong demand for the Pajero. The vehicle which costs between Rs 25 lakh and Rs 35 lakh, is at present imported directly by customers. The Tiruvallur plant is capable of accomodating Pajero with minor modifications and minimal additional investment.

We are planning to bring out an improved version in 6 or 7 months time.

In the mid-size entry level segment other cars have improved sales, but our positioning is mid-size premium. You see some people make things out of brass and some out of gold. We are the best in absolute terms. Its an achievement which cuts across categories. This positioning makes it a good business proposition.

We look at it as an opportunity, as a whole range of Mitsubishi cars can be imported, under the situation. Mitsubishi has the expertise to deal with second hand cars. They also have a good distribution system.