Speaking to the media at the company's Tiruvallur plant near Chennai, Mr BKChaturvedi, president, HML said that Pajero can be manufactured at theexisting facility (which produces Lancer models) with minor modificationsentailing insignificant investment. Pajero, he said, would ideally fit intothe massive gap that currently exists between Lancer and Mercedes Benz.

Mr S Vasudevan, general manager - sales & service, HML said the company haddone a dip stick survey of the Indian market for acceptability of Pajero,and the outcome not only revealed a strong brand equity for the product butalso a clear demand. Indian customers, as per the survey, feel Pajero to bea good buy at Rs 20-22 lakh against the current landed cost of anywherebetween Rs 25 and Rs 33 lakh for the imported model.

Whether HML will launch only one variant or introduce many variants ofPajero would depend very much on the import duty structure, price of thekits and the acceptance of the Indian market, he added.

Another model is required for HML to bolster the capacity utilisation of itscar plant near Chennai, which is currently hovering around 50 per cent. Thecompany expects to sell 8,500 Lancers this fiscal. There is little scope forthe company to significantly improve upon this number, considering thepremium and low-volume segment it caters to.

According to Mr Chaturvedi, the existing facility at Tiruvallur will breakeven only at a volume of 10,000 to 11,000 units, and this is expected tohappen only in 2001-02.

Meanwhile, HML hopes to capitalise on the excellent performance of Lancer inthe JD Power survey, which rated the model as the `best premium mid-sizecar' in India for two years in a row. It has topped the India InitialQuality Study (IQS) which examines initial vehicle quality for three to fivemonths' ownership, with a low 84 problems per 100 cars - lowest in Indianautomobile history. Lancer had shaved off 40 points in this parameter alone,compared to the previous year and the nearest competitor is 27 points away,which goes a long way in explaining the product superiority, Mr Chaturvedisaid. This, he added, despite increased localisation during the year. Lancerhas also topped Automotive, Performance, Executive and Layout (APEAL) study, which probes the strength and positive characteristics of a particularmodel.

HML is beefing up its dealership network in order to boost Lancer sales. Itwill shortly be adding 12 showrooms to the existing 40. HML's marker sharein the mid-size premium segment currently stands at 40 per cent and thecompany plans to improve upon this through better market penetration. Itsindigenisation level currently stands at 56 per cent and HML plans toincrease it to 70 per cent by March 2002.