Speaking to The Financial Express exclusively, Mr Gandhi said that the major chunk of the investment will be used to procure additional equipment, machinery and toolings, and to set up paint shops and assembly lines to enhance the production capacity from 1,30,000 cars to 2,00,000 cars every year.

As part of the investment, the company will introduce new models every year and will launch a new car -- Sonata -- in mid-2001. ``All the future models will be totally indigenised to suit the Indian conditions,'' Mr Gandhi said.

HMIL will effect a minimum 3 per cent (Rs 10,000) price hike in its cars in a two-to-three weeks' time. ``However, we have not yet decided on the exact hike,'' Mr Gandhi said.

``The rupee/dollar fluctuations and the recent oil pool crisis have put the pressure on us to go for the price hike. We are in the final stage of discussions, and have taken every aspect into consideration before opting for the hike. We feel that the price hike will be minimal considering 85 per cent indigenisation at our factory. We are the second largest car producer in India now, and we want to become the No 1 manufacturer another year,'' he added.

Mr Gandhi claims that HMIL is ahead of Maruti Udyog Limited for the past four months and ``will continue to remain so for ever. We are gradually moving into the third shift to meet the future demands from domestic as well foreign markets.''

After entering into SAARC nations, HMIL has recently exported 750 cars to Algeria. ``We have set up a minimum target of 6,000 cars for export during this fiscal,'' Mr Gandhi said.

The automobile industry, which is affected badly due to the sales tax structure, rupee/dollar parity and the oil pool crisis, is expected to post a single digit growth as against the 15 per cent growth last fiscal, he said.``Despite this, we at HMIL are confident that we would surpass our projected sale of 80,000 cars during this fiscal; this could be possible because of the 85 per cent indeginisation at our factory. We will achieve a minimum of 10 per cent growth every year,'' he said.

``We are waiting for the new automobile policy, which is expected to be announced in November or December this year, to change our course of action, and will also go in accordance with the World Trade Organisation norms,'' Mr Gandhi said.