'Twin' entry level diesel cars from MLR Motors by 2009

Hyderabad, Feb 16 (UNI) Work on the Rs 1250-crore diesel car project in Andhra Pradesh is likely to start by March end this year and the first twin diesel entry level models are expected to roll out of the assembly lines of the private sector MLR Motors by 2009.

The company has already deposited Rs three crore of its share with the APIIC to enable transfer of 250 acres near Medchal in Ranga Reddy district for the project, LML Managing Director M Lokeshwara Rao told media.

The Andhra Pradesh government has already offered a ten-year tax VAT holiday, subsidised power and water, besides proposing to hand over an additional 250 acres for setting up ancillaries.

The three-phased Car project which will initially roll out 900 cc and 1500 cc diesel models at the entry level, will migrate to CNG and petroleum powered automobiles by 2011 when the overall investment, including those on ancillaries is likely to be around Rs 5000-6000 crores.

The initial investment on the Car project will be Rs 750 crore and another Rs 500 crore on Lokesh Machines Limited (LML) which will produce about 30 per cent of the auto components, including engine blocks and gear boxes for the car project.

The car project will also access the press and assembly lines of defunct Daweoo plant near Delhi which has been purchased earlier this week by Mr BVR Subbu, the former Hyundai Motors India President, and an equity partner in MLR Motors along with Mr Rao.

Mr Subbu holds 21 per cent stake. MLR Motors is also in talks with foreign banks for raising loan for the AP Car project.

The AP Car project will have an initial capacity of 60,000 units annually which could be scaled up to two lakh cars a year UNI