Hindustan Motors has suspended operations at its Uttarpara plant. The company, in a statement to the Bombay Stock Exchange (BSE), has confirmed this news. The flagging sales, lack of funds and the accrued liabilities seems to have been the reason why the production was halted.
It was in the news earlier that the company is looking for a strategic investor and an announcement was to be made during the April-June 2014 quarter. After failing to get an investor the company decided to demerge and transfer its car plant in Chennai to its fully owned subsidiary – Hindustan Motor Finance Corporation Ltd (HMFCL) in January 2013.
HM had been struggling for a while now and its once loyal customer, the Indian government, also moved to more modern cars. This was one of the major reasons for the Ambassador’s declining sales. If HM has to rise from the ashes they have to reinvent their product line-up and introduce more models. It seems a little difficult though and we might witness the company even shutting shop.
