Mistubishi and Hindustan Motors to cut capex, small car plan on hold

Mitsubishi and Hindustan Motors’ ambitious small car plan is on hold now due to the lack of funds from Japan and poor demand. It forced both the companies to cut capital expenditure (capex) for the current year. The company planned to launch the premium compact car through its technical tie-up with the Birla Group-promoted Hindustan Motors in 2011-2012. The plan intended to re-engineering a compact car from Mitsubishi’s global portfolio for the Indian market or building a new car from scratch. Speaking about the plans, Ravi Santhanam, managing director, Hindustan Motors, said, The (automobile) market has become very volatile, so it’s hard to make a prediction even two months down the line. In view of this we have decided to revise our capital expenditure for 2009-10.