The current indigenisation level is around 50 per cent, he said, adding that the technology for in-house manufacture had been fully absorbed.

Talking to reporters after the company's 58th annual general meeting here, Mr Birla said that 8,400 Lancer cars, manufactured in technical collaboration with Mitsubishi, were sold last year. In the current year, 3,000 Lancers have been sold till date, he added.

The Lancer plant, located in Chennai, has a production facility to manufacture 24,000 cars per year. The plant is currently running at less than 50 per cent capacity utilisation.

Commenting upon the sales of Ambassador, the chairman said that nearly 2,000 cars were being sold each month. He said that sales of Ambassador cars are increasing, and is expected to register higher sales volume than last year.

The company had already introduced CNG versions of Ambassador in Mumbai and Delhi. Mr Birla said that the CNG version has perked up Ambassador's sales.

In an attempt to soothe shareholders' nerves, who complained of lack of dynamism on the part of HM's board in responding to market trends, Mr Birla said that the company is making all efforts to reduce losses in the current year.

HM had incurred a loss of Rs 62.2 crore in 1999-2000, and Rs 36 crore in the first quarter of the current financial year.

Mr Birla said that the interest burden on the company would come down substantially due to conversion of loan of Rs 53 crore into equity this year.

He also hoped that certain contingency liabilities would also be ruled in favour of the company.

When asked about the Proton project, HM executive director A Sankara Narayanan, said that the MoU with the Malaysian car manufacturer would be valid till December this year.

He said that the company was yet to communicate to HM whether it was keen to utilise the facility at Chennai plant which manufactures Lancer.

HM, the oldest car manufacturer in the country, has skipped dividends for two consecutive years inviting the shareholders' wrath.