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Old 4th May 2010, 14:01   #16
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this is the story that should be added in the scoolbooks of 3rd or 4th grade in the section of do's and dont's .
kids will learn early in their life and there wont be any other sorrow story like this in india's automotive future and thus the next generations wont suffer from the pain which we suffered while we looked at HM's progress.(?)
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Old 4th May 2010, 14:59   #17
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Companies that go to BIFR can emerge successful post restructuring. The promoters have just about 28% stake.

One flight of fancy (and highly likable for T-BHPians) option can be to de-merge the Mitsu arm with significant holding by creditors and separate equity infusion by Mitsu. Currently Mitsu has no promoter stake in HM*. Current promoters anyway have majority of their shares pledged (60%) which if invoked, as is likely to be, can leave them with 10% stake.

This would enable Mitsu management control. This would then see a flurry of launches including the Colt, EVO, Gallant, Eclipse within the next few years. Soon after Mitsu has the global launch of its electric car in India in 2012. In 2015 Mitsu grabs a 5% share in the Indian market.

Oh how I wish!

Cheers,

*based on my reading of the shareholding

Another HM trivia: the just-ex-CEO is listed as a promoter of the company.

Last edited by diffsoft : 4th May 2010 at 15:09.
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Old 4th May 2010, 15:07   #18
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Quote:
Originally Posted by GTO View Post
The company's networth is Rs. 164 crores, but is sitting on accumulated losses of Rs. 132 crores. Also, HM has lost 50% of its net worth in the last 4 years.

A classic example of failure : The HM Ambassador once ruled the (protected) Indian car market, alongwith the Premier Padmini (and a couple of Jeeps). Enter Maruti in the 80's, then India opened up to global players in the 90's...still, HM continued to do business the ol' way. While newer players introduced cutting-edge cars, HM till date sells the WWII Ambassador, the 7th generation Lancer (a '1995 model) and the 8th gen as well (though a 9th gen has been introduced worldwide). You'll find another old lady in the 2nd generation Pajero...an SUV that made its world debut in 1992, yet somehow, HM manages to sell some at 20 lakhs 20 years down the line!

Come to think of it....showing up at the BIFR office was inevitable! Premier, in the meanwhile, has launched some Chinese SUV-wannabe that's powered by a Peugeot diesel they had lying around in the dusty warehouse.

Conversely, consider the position of the other two homegrown players : Tata & Mahindra. Healthy, sitting on a pile of cash and continuously growing their marketshare. Another remarkable story is that of Bajaj Auto, and how they came out of the "Hamara Bajaj Scooter" mindset. The kind of stuff to be proud of.

News Source - The Economic Times

Related Threads:

History of HM (Hindustan Motors : History)

HM to exit car business (Hindustan Motors rumoured to exit Car business)

When will the new Lancer come to India? (New Mitsubishi Lancer. When will it come to India?)

Reviving the Ambassador (Hindustan Ambassador revival)

HM's new model (HM to launch a new model in October)
I agree with you GTO.
HM should have tried some new launches long back. One question.?
What has happened to Mitsubishi.? They should have followed Suzuki's footsteps.
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Old 4th May 2010, 16:14   #19
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Quote:
Originally Posted by diffsoft View Post
Companies that go to BIFR can emerge successful post restructuring.
While i can agree with the optimism, in case of HM I am not sure of how they can come out of this.

1. Do they have any upcoming products from their own stable?
2. Assume Mitsu gives them license to produce a car locally, do they have time and money to deliver the product?
3. Will they be able to import and competitively sell a Mitsu products?

I guess the answer to all above is NO albeit for different reasons.

Only hope i have is that Birla as a group has few very capable people on their team. If group takes it seriously then they may make it.

Just my 2 cents.
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Old 4th May 2010, 16:19   #20
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I hope Mitsubishi takes over from HM. Then we can finally see some of the good stuff that's available globally, not just the leftovers.
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Old 4th May 2010, 17:22   #21
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I dont think Mitsubishi is doing great globally.They believe in more of institutional sales rather than trade.Most of their customers are Govt agencies UN etc.
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Old 4th May 2010, 17:22   #22
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I just wish the Mitsubishi buys of the HM plants and Sales and Service network and does a complete re-vamp and branding exercise. I guess that will be a good start for Mitsubishi.

BTW, I did not include the labour related problems the Mitsubishi might face but I guess they can find a solution to it if they get take over!!!
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Originally Posted by n.devdath View Post
You know what surprises me the most. HM could not revive itself inspite of having a capable and world class partner like Mitsubishi with them.
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Old 4th May 2010, 17:32   #23
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It is highly unlikely that Mitsubishi will associate itself financially with HM. They themselves struggled through most of the last decade with a bailout request raised in 2004. They have just managed to make a 4.75 billion Yen profit in the last fiscal which is positive considering they were in a 54.88 billion Yen loss in the previous one.
It does not make sense for them either, because rather than the handfull of Sedans and SUVs, Mitsubishi doesnt have any model that will churn volumes in India, especially in the small car segments. The Colt will end up being overpriced in the Indian context.
HMs motherplant in Bengal has serious issues with work ethics and this has been reiterated various times. Luckily the Mitsubishi operations are a seperate entity in Chennai.
The only loophole I can find is the PSA group. After their previous disaster with Premier they will definitely want a slice of the Indian action. The group is very strong in two things we Indians love, small cars and Diesels. PSA has very strong ties with Mitsubishi and were almost close to announcing a tie up but PSA withdrew at the last moment suspecting Mitsubishi's financial health.
PSA has openely declared their interest in India and have been talking to the TN and AP governments. Taking over HMs operations (at least the Mitsubishi one) will give them ready access to both production facilities and a distribution network.
As for the Amby, I think after a odd sales boost from Govt. orders now and then, it will die a slow death. All due respects to the stalwart but high time its laid to rest.
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Old 4th May 2010, 18:04   #24
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Even the laymen in our country has seen and understood the changes in Auto industry, so it is obvious that nerds and management gurus at HM must have understood it very well too. And in order to address the needs of chaning times, we could have seen at least one corrective action from HM management. However there are none.

To me it only means HM is destined to sink, and management is working towards it.
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Old 4th May 2010, 22:57   #25
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Sad to read about the plight of HM and the fact about the BIFR reference.BIFR is basically a funeral performing government PSU which performs the last rites of companies.
Hopefully BIFR should be kept at bay and I pray that HM 's health is revived soon. It should play market savvy at least now after decades of aloofness and make products that the market wants.
The government orders for the Ambassador are waning due to choices being more and more for the Indigo and even the DZire / SX 4 by Babus these days. The Air Force and Navy are buying hundreds of Indigos to transport their senior officials.
Ambassador sales are attributed to the Kolkata HC order banning 15 plus year old taxis. So Kolkata roads are full of newer Ambassador 1.5 litre DSL, BS II compliant (now BS IV)taxis moving while the older ones are going to scrapyards.
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HM should invest in upgrading the Amby with a more modern engine 100bhp plus (the ISZ 1800/2000DSL are two decades old in India and maybe three decades old for the international market), transmission and better suspensions (rear independent), high quality interiors to attract private buyers. There are still many people who value the Amby as a rugged car but cannot cope up with the archaic technology.
The Mitsubishi range is all underrated. The Lancers,Cedias, Pajeros,Outlanders are dream cars/SUV's for a very select few. They lack the marketing punch! Where are the B segment cars from HM ? Even Toyota has jumped into the fray after Ford, GM and VW.It has become very crowded now for HM to venture there. But now B segment is where the action is!
Even the TOI last Sunday edition listed HM as a company that has lost out in the globalisation process.
Lets only hope HM emerges out in good health!

Last edited by anjan_c2007 : 4th May 2010 at 23:03.
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Old 5th May 2010, 01:16   #26
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I for one am not getting misty learning about HM's fate. As i've mentioned many a time in this site, the Amby should have been given a decent burial a long time ago. Good riddance to bad rubbish, which includes the company mainly. Atleast, i hope so this time around.

Last edited by nickatnite : 5th May 2010 at 01:17.
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Old 5th May 2010, 03:12   #27
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HM is no LML to come out of BIFR so easily. They lack vision and motivation to compete.

The only way HM can really get back into the market right now with their limited cash flow is getting a cheap car platform from the likes of AutoVaz or Proton and selling it in India. Getting the Mitsubishi Galant/380 machinery from Australia for cheap also makes sense since it has been discontinued.

HM has tons of ways to make out of this mess quick and well but the people who run it are FOOLS. I can bet that even fresh college grads can run the company better. But then I have also heard lots of horror stories about the baburaj that prevails in Bengal.

Last edited by devarshi84 : 5th May 2010 at 03:14.
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Old 5th May 2010, 16:45   #28
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I'm seeing a lot of comments on Mitsubishi entering the Indian market independently. FAT CHANCE! Simply because Mitsubishi itself has had a pretty rough decade thus far. In fact, they're so cash-strapped that they couldn't even design an all-new Pajero / Montero. The model that they sell currently shares its underpinnings with the older Paj (a 10+ year old design). Except for 1 - 2 cars, Mitsubishi simply doesn't have cutting-edge tech or R&D to compete with the worlds biggies today. Within the Indian scheme of things, their brand value was very high in the end-nineties. Everybody wanted the Lancer. However, HM's practice of flogging the car till its dead has left Mitsubishi with poor brand recall today. Can Mitsubishi compete in the sub 10 lakh segment today? Very low chances, I'd say.

Quote:
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What if some powerful govt lobby decides to place a HUGE order for say,some 500-1000 more ambys, just to increase the Birla group's company value - out of the sick' state?
The Ambassador has already sold close to a 1,000 units in (some) recent months. Your suggestion reminds me of the saying "Give a man a fish; you have fed him for today. Teach a man to fish ; and you have fed him for a lifetime". One govt. order is not going to do anything. It'll only prolong the inevitable.

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I'm the second pessimist! The Amby has so much retro appeal,and evokes memories of India's automotive past. Coupled with the 1.8 ISZ petrol,it can still give some hatches out there a run for its money in most departments except quality. And its always nice to have a retro car around,lending some charm & variety to the market!
Sure does. But the fact is sales - and NOT emotions - run companies.

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Originally Posted by anjan_c2007 View Post
Sad to read about the plight of HM and the fact about the BIFR reference.BIFR is basically a funeral performing government PSU which performs the last rites of companies.
Well said, man!
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Old 5th May 2010, 16:59   #29
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As I have said in an earlier thread about Amby, no tears and good riddance for the imminent demise of H.M - a company that squandered a near monopoly it had in our market.
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Old 5th May 2010, 17:00   #30
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Quote:
Originally Posted by GTO View Post
I'm seeing a lot of comments on Mitsubishi entering the Indian market independently. FAT CHANCE! Simply because Mitsubishi itself has had a pretty rough decade thus far. In fact, they're so cash-strapped that they couldn't even design an all-new Pajero / Montero. The model that they sell currently shares its underpinnings with the older Paj (a 10+ year old design). Except for 1 - 2 cars, Mitsubishi simply doesn't have cutting-edge tech or R&D to compete with the worlds biggies today. Within the Indian scheme of things, their brand value was very high in the end-nineties. Everybody wanted the Lancer. However, HM's practice of flogging the car till its dead has left Mitsubishi with poor brand recall today. Can Mitsubishi compete in the sub 10 lakh segment today? Very low chances, I'd say.

The Ambassador has already sold close to a 1,000 units in (some) recent months. Your suggestion reminds me of the saying "Give a man a fish; you have fed him for today. Teach a man to fish ; and you have fed him for a lifetime". One govt. order is not going to do anything. It'll only prolong the inevitable.



Sure does. But the fact is sales - and NOT emotions - run companies.



Well said, man!

I agree to you :HM Policies,Practices & above all Top Management-Babuji - is not Right.What I have heard & believe is - they want govt Subsidary - for tax & than they might sell the company to Mitsibishi - Mit previously offered 300 cr but they demand 700 crs -I doubt that they even would get that amount or close to that amount - even after govt subsidary

But yes if some company can buy Mitsubishi's plant(owned by HM) if even not mitsubishi that that as well would be good for Mitsubishi product owners
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