"Mitsubishi may buy the 10 per cent stake in HM at any point of time they want to. However, we don't know when they will exercise that option," Sankara Narayanan said.

Under the agreement with the Japanese auto major, Mitsubishi is free to pick up 10 per cent stake in Hindustan Motors.

Launching the `Lancer' in the capital on Thursday, Narayanan said the company hopes to sell about 4,600 cars this fiscal and over 12,000 next year.

Available in both petrol and diesel versions, Lancer is the latest entrant in the mid-size luxury-car segment, at present dominated by Maruti Esteem.

While the petrol version, 1.5 GLX, is priced at Rs 7.33 lakh (ex showroom Delhi), the diesel variant 2.0 GLD comes with a price tag of Rs 8.34 lakh.

Narayanan said HM was undeterred bythe dismal performance of the mid-size cars, which recorded a negative growth of over 9 per cent in the first half of the current financial year.

"We are not worried about volumes. Lancer is targeted at a niche market and we are optimistic of maintaining our sales target," he added.

The petrol version is a 1498cc, 68 BHP car, while the diesel version has a 1948cc engine under the hood with equivalent BHP as that of the petrol version.

Lancer is equipped with suspension systems specially developed for Indian roads, five speed gear box and ventilated disc brakes.

Both the petrol and diesel versions will provide a mileage of 12 kms to 13 kms in city driving conditions, Narayanan said.

The car will be sold through Hindustan Motor's exclusive red line dealer network and supported by a wide network of after sales service centres.

Hindustan Motors has invested Rs 380 crore in its manufacturing facility at Chennai which has an annual production capacity of 24,000 units.

The greenfield plant atThiruvallur near Chennai was set up in record time of one year with the full backing of Mitsubishi Motors.