Struggling Indian carmaker Hindustan Motors on Wednesday said it was in talks with a host of foreign carmakers, including Germany's Volkswagen, to supply components and was eyeing an over Rs 300 crore (Rs 3 billion) business from component outsourcing in the next three years.
"Volkswagen is in talks with us for panels and we are also talking to other carmakers like Peugot and Mitsubishi," Hindustan Motors executive vice president Ashwani Dubey said.
The CK-GP Birla group company manufactures most of the components, including those for its in-house requirements, at its plant in Uttarpara in West Bengal and Dubey said the quantum of business from components stood at around Rs 200 crore (Rs 2 billion) last fiscal, which included Rs 150-170 crore (Rs 1.5-1.7 billion) for internal consumption.
"While Rs 150-170 crore was used for our internal consumption, the actual outsourcing last fiscal was about Rs 25 crore (Rs 250 million)," Dubey said.
He said the company expected the outsourcing to more than double to about Rs 65 crore (Rs 650 million) this fiscal and to grow to twice that amount in the next year.
"As per estimates, component outsourcing from Uttarpara could cross Rs 300 crore in the next three years," he added.
HM eyes 50% hike in Ambassador sales
Eyeing a revival, CK-GP Birla group's Hindustan Motors Ltd said it expected sales of its flagship 'Ambassador' cars to go up by 50 per cent in the next three years to 18,000 units annually.
"We are targetting monthly sales of 1,500 units in the next three years with government orders coming back again and also expect a pick up in the personal-use segment," Dubey said.
Facing a stiff competition in the market, Ambassador managed a modest four per cent increase in sales last fiscal to about 12,600 units, with nearly 1,000 units coming from personal use segment, Dubey said, after launching the 1.8L CNG Bharat Stage III Ambassador Grand model costing Rs 400,000.
In the days ahead, HM expects to do about 150 units per month on the personal use segment even as the bulk of sales would continue to come from institutional segment.
"Already we have got orders for 200 cars from the government and the Army has ordered for 400 units," he said, adding the company expected to sell 1,400 units this month.