Subbu: On a roll

Hyderabad, Feb. 18: B.V.R. Subbu, former president of Hyundai Motors India, who turned the tallboy design of the Santro into an awesome winner, is getting ready to take on the moguls of Motown.

Subbu — who left Hyundai last March — had indicated that he would become a consultant to automobile players and probably turn into an entrepreneur. In the past fortnight, he has done a bit of both: First, he teamed up with Ajay Singh of SpiceJet and a couple of non-resident Indians to set up a special purpose vehicle called Crosslinks, which purchased the mothballed Daewoo Motors plant at Surajpur, Uttar Pradesh, for Rs 765 crore.

He’s now planning to take the battle to the Tatas, Hyundai Motors and Maruti Udyog with a cheap, entry-level diesel car that will roll out in 2009. Two versions of the car are planned with engine capacities of 900 cc and 1,500 cc and these are expected to challenge Tata’s Indica and Hyundai’s Santro and its planned replacement.

“We are planning to give the Tatas a run for their Indica and Hyundai for their Santro,” says Subbu, who worked as a Tata executive for 18 years before spending 10 years with Hyundai. “We are not planning to come out with a Rs 1-lakh car like the Tatas.”

Subbu has teamed up with M. Lokeswara Rao to form a new company, MLR Motors Ltd, which plans to make diesel cars. Petrol and CNG versions of the model will follow. The foundation stone for the ambitious car project will be laid in April. Lokeswara Rao owns two other companies. A machine tools company called Lokesh Machine Tools Ltd (LML) and an autorickshaw making plant, Lokesh Motors Ltd, in Hyderabad.

The new company has acquired 250 acres near Medchal — about 45 km from Hyderabad — and plans to invest Rs 1,250 crore.

“We cannot give a clear picture about the price of the car but can only say that it will be an entry-level car on par with the competitors,” said Rao. Sources said the car would be priced between Rs 3 lakh and 3.5 lakh. Subbu will have a 20 per cent equity in the project, while Lokesh Machine will hold 31 per cent. The rest will be held by strategic investors.

The plan is to invest Rs 5,200 crore over five years. The new car plant will initially have a capacity to make 60,000 cars a year, which will be eventually raised to 1 lakh cars a year.

Meanwhile, Lokesh Motors plans to bring out an LCV pick-up van by the middle of 2006 that will provide competition to the hugely successful Tata Ace.