‘It is Mitsubishi’s decision to take the India market seriously or not.’

Uttam Bose, managing director of Hindustan Motor Finance Corp, speaks to Shobha Mathur on bringing new SUVs and the Attrage sedan to India, the company’s existing models and the growth plan going forward.

Last year, Mitsubishi Motors’ business plan for 2014-16 spoke of five new models to India? How far are they on track?
It is going in the same direction. In 2014-15, we have already launched two new models – the Pajero Sport automatic 4x2 and the 2014 Pajero Sport 4x4 manual that is on the roads is an absolutely new model.

In 2015-16, there will be two more launches –the new Outlander and the new Montero. These two would be launched this year in both automatic and manual variants. Both are coming in petrol version while diesel will come next year (2016).

Mitsubishi was also planning to bring the Mirage hatchback and Attrage sedan to India. What are your comments?
It is being worked out and we are seeing the feasibility but we are not considering the Mirage hatchback, which was launched in Thailand last year, as it is not making business sense.

The Attrage sedan will come in 2016-17; studies are underway and we are working on it after which we will take some decisions. It is a midsized sedan and it will come in diesel only with manual transmission. We are not looking at an automatic option.

Will the Attrage sedan be made locally and how much localisation are you targeting?
Yes, it will be assembled locally at Hindustan Motors’ manufacturing facility in Chennai. Localisation is always a problem and will not be more than 20 percent. It will come in the form of CKD kits from Thailand.

What numbers are you looking at for the Attrage initially and how much is the current capacity of HM’s Chennai plant?
We are looking at a figure of 300 units per month. We are working one shift at present in Chennai and can produce 1,200 vehicles a month. We are using 50-60 percent of the current capacity, so the balance will be used some for the production of the Attrage sedan, and some for the Montero and Outlander SUVs. We are keeping a capacity of 200 units a month together for both these models. The balance 250 units will come from Isuzu Motors’ D-MAX and MU-7 which are also made at our Chennai facility. For Mitsubishi, we are making the Pajero Sport automatic and MT version there at present.

Are you also looking to use the automated manual transmission in any of your models?
No, we are not looking at it.

How is the automatic Pajero Sport faring in the market?
I must say that the response is good and along with the manual version we have practically doubled our sales that are nearly 300-350 units a month. Not too much but from where we were around 150 per month for the vehicle, I think this is a good jump.

Any plan to enter the compact SUV market?
No, we have no plans to enter this market as of now.

What is the sales target under Mitsubishi’s ongoing business plan?
We will achieve sales of 1,000 units per month of Mitsubishi vehicles.

Will you contract manufacture for any other vehicle manufacturer, given that the HM plant can be scaled up to 5,000 units a month?
Not now. That is not the focus.

Is it that the Mitsubishi brand has not been able to grow too much in India because of its tie-up with HM?
We are the technology partner and we have been carrying out the assembly operations in Chennai but the major decision of the India market – whether a model comes or doesn’t come – lies with Mitsubishi. It is Mitsubishi’s decision to take the India market seriously or not.

Will you look at exporting the Attrage from India once local assembly kicks off?
It will be made only for the domestic market. We have an understanding that none of the models that we manufacture in India will be for exports.

Which other model can Mitsubishi bring from its global portfolio?
As far as Mitsubishi is concerned, its focus is on SUVs and the company is not concentrating on passenger cars. They want to remain in the niche market and that’s what they are doing.

Which is a global SUV model that can likely be brought in?
Globally, the plug-in hybrid electric (PHEV) vehicle is doing very well but in India, electric cars are a distant proposal. So I don’t think there is much of interest on that score and India too is not prepared in terms of infrastructure for it.

What will be the strategy for the emerging markets and how important is India for Mitsubishi?
Our focus is SUVs which account for 2,600 vehicles a month in the utility vehicle segment where we are present. So that means not more than 30,000 units annually. And we are not targeting the mass segment.

So what kind of growth are you looking at in India?
We are looking at sales of 1,000 cars per month in the next two years from 150 units.

How is the company’s pre-owned business doing?
That is picking up but as far as the India market is concerned it is too nascent. Mitsubishi cars are available at the organised outlets of Mahindra First Choice and Maruti’s True Value. We are not establishing separate outlets for used vehicles.

How do you plan to scale up the dealer network to complement the new models?
At present, we have 42 outlets that will be spiked up to 49 by March-end. During 2015-16, we will work on a network strategy that will put in place 55-60 outlets. Currently, Tier 2 cities contribute 30 percent and Tier 1, 70 percent of the sales. With smart cities being developed, 80 percent of the business will come from Tier 1 cities and 20 percent from Tier 2s.

Also Read: HMFCL explores making Mitsubishi Delica MPV in India, Attrage sedan coming in FY17