It is probable that Mitsubishi Motors could exit India in the near future as the much-talked-about deal with a Jamshepur-based component manufacturer is said to have come to nought.
The deal first came to light in June last year and had Mitsubishi India and the component maker reached a mutual agreement, it would have marked the beginning of the Japanese carmaker’s second innings in the country.
Reportedly, the new investor was about to infuse Rs. 500 crores into the Indian arm of Mitsubishi, which would have resulted in the setting-up of an assembly line in Jamshedpur for manufacturing vehicles which would rival the Hyundai Creta and Toyota Fortuner.
However, the negotiations have fallen through now. But, it must be noted that Hindustan Motor Finance Corporation Limited (HMFCL) had denied that this tie-up was taking place at all.
As things stand, HMFCL is cash-strapped and it would either have to find a new partner or down its shutters altogether. With only 6 employees reportedly in its fold, the company does not have any retail outlets as of now all of Mitsubishi’s 11 showrooms are inactive.
Some former Indian dealers of the carmaker have claimed that HMFCL has not yet refunded their dealer deposit. What’s more, a couple of dealers are likely contemplating legal action as well.
The last car that Mitsubishi retailed in India was the Pajero Sport in January 2020. Between April 2019 and January 2020, the brand sold about 30 cars and from April 2018-January 2019, it retailed 164 cars. Due to lack of enough funds, Mitsubishi has not been able to import enough spare parts to India from Japan either.
All these factors point to Mitsubishi India exit becoming a reality in the future. If it happens, the firm would join Fiat, Chevrolet, among others, in the list of automakers who failed to make a mark in the nation.
But, a HMFCL spokesperson has allegedly stated that Mitsubishi Motors is developing multiple BS6-compliant models, work on which has been delayed due to COVID-19. The representative has also revealed that the brand’s Indian dealerships are ready to continue business.
Although, the spokesman has tried to paint a rosy picture about the company’s future in the Indian market, speculations will continue to mount until the Japanese car brand provides an open statement about its Indian arm’s current state of affairs.
Source – FinancialExpress.com