Hindustan Motors and a firm based out of Europe are in advanced talks for a joint venture and a Mou has recently been penned down
Hindustan Motors, the first car manufacturer in India, is looking to make a comeback in the near future according to a recent report that emerged on the internet. HM and a firm based out of Europe are in advanced talks for a joint venture and a Mou (Memorandum of Understanding) has recently been signed and the due diligence could begin soon.
Uttam Bose, Director of Hindustan Motors said in an interview that the project will launch two-wheelers and subsequently four-wheelers. The talks surrounding the JV are on but Bose did not shrug off the possibility of the brand grabbing a stake in the CK Birla owned Hindustan Motors. Right now, the discussions are about a 51:49 per cent JV with HM having the higher share.
He further noted that the equity pattern might be evaluated. The vehicles would be manufactured at the now-defunct Uttarpara plant in West Bengal which last rolled out the Ambassador in 2014. The FY2021-22 annual result notes indicated that the management declared suspension of work from May 24, 2014 due to low productivity and demand.
Meanwhile, the Pithampur plant declared layoff with effect from December 4, 2014. Groupe PSA penned down two joint ventures with CK Birla group in January 2017 and the Ambassador nameplate was bought for Rs. 80 crore from HM which is owned by CK Birla group. Recent reports say the developmental work on a new Amby has commenced with the design and mechanical work for the new powertrain at an advanced stage.
Hindustan Motors was set up before Indian Independence in Gujarat. In 1948, its operations moved to West Bengal where the Ambassador’s production started. The Amby was India’s most sold passenger car for more than thirty years and its production lasted nearly six decades.
The new joint venture will make use of 295 acres of land at Uttarpara for the project. The front-wheel-drive favourite Indian saw the launch of Grand, Avigo and Encore in its last generation. Bose believes Hindustan Motors has the manufacturing unit and the necessary infrastructure and would initially invest Rs. 300-400 crore.