MUMBAI, August 19: Japanese conglomerate Mitsubishi Corporation has decided not to exercise an option to pick up 10 per cent stake in automobile major, Hindustan Motors due to turbulence in its home market and a falling Japanese currency. ``Mitsubishi will not pick up any stake in Hindustan Motors in the near future though they do have an option,'' executive director, A Sankara Narayanan, said.Though the company is all set to propel Mitsubishi's Lancer model in September, Mitsubishi's reluctance to pick up stake is likely to affect Hindustan Motors' fund raising plans as the funds would have come at a premium. The company is, however, increasing its equity capital to Rs 150 crore by launching a rights issue.Mitsubishi's equity stake, officials say, would have helped the Indian company to get marketing as well as technological infusion from Japan. ``As the Japanese company is going through a rough patch, we do not expect them to pick up stake in our company,'' Nayayanan told this newspaper. ``But we areopen to their presence,'' he said.Another issue to be sorted out between the two companies is the equity stake held by Hindustan Motors in its joint venture with the American car giant, General Motors. ``Ultimately, we have to decide between GM and Mitsubishi as both the companies would not like each other's presence,'' sources said.For the time being, Hindustan Motors is concentrating on the niche market by introducing Mitsubishi's Lancer model in India. The company is expecting Lancer model to sell about 4,000 units by the end of current fiscal despite the ongoing recession in the automobile market. The car has been targeted in the mid-sized segment with a price tag of Rs 8 lakh. ``Mitsubishi's Lancer has done well in other markets, we expect same performance in the Indian market,'' officials said. But officials say that Lancer would not impact its bottomline much as the sales of its flagship brand - Ambassador - has dwindled. ``With the launch of Lancer, we are penetrating into a new segment,''officials said.
