Hindustan Motors -- India’s oldest carmaker is in talks with some foreign powertrain manufacturers to source a new diesel engine to replace the 1.5 litre diesel for the Ambassador.

Its 2.0 litre diesel is currently undergoing tests at the ARAI. Ambassdor’s petrol, CNG and LPG engines have been upgraded to be BS IV compliant. HM also plans to monetize some of its non-core business/assets to strengthen itself financially. There could also be an equity partnership with its Japanese partner – Mitsubishi. Replying to a query from Autocar, an HM official said “plans have been there but we cannot specify any timelines”. He also said that Mitsubishi will have a ‘couple of new launches’ during this financial year. Mitsubishi dealership and service centres will be hiked to 50 during 2010-11, from  the current level of 36 dealers.

Hindustan Motors recently reported itself to the BIFR (Board for Industrial & Financial Reconstruction), as its net worth eroded more than 50% of its peak net worth during the immediately preceding four years.

Its losses mounted to Rs. 42.85 crores in the year that ended on March 31, 2010. Losses during the previous year stood at Rs. 37.78 crores. HM says even though its networth has gone down, its flagship Ambassador’s production will not be affected. The company expects to sell around 1,000 Ambassadors monthly during this year. With the new plans HM says it is ‘confident’ of making profits this year.