Speaking to reporters here, BK Chaturvedi, president of HM's automobile division, said the company at present had 92 dealers across the country for Ambassador cars, a little over 40 for Lancer and about 25 for the Trekker. But this, he said, was just not enough to ensure proper penetration of many markets, especially in the suburban and rural areas, as a significant chunk of the dealerships are concentrated in the east and southern part of the country.

For example, the company has only four dealers to cover the entire state of Madhya Pradesh, he said. The distribution was weak in north and western parts of the country.

HM consequently is planning to expand and restructure its dealership network with increased emphasis on non-metro regions. This also fits into the positioning of all its models barring Lancer.

Ambassador, Contessa, Trekker and RTV are targeted at the rural and suburban markets. ``Ideally we would like to have a dealer in every district headquarters'' Mr Chaturvedi said.

Plans are afoot to add 35 dealers this fiscal for selling Ambassador, Trekker etc and about 12 new dealers will be in place for Lancer.

The three-layered distribution network which the company had till now viz. red line for Lancer, blue line for Ambassador/Trekkers and green line for RTVs is being reduced to two. The blue line and the green line dealerships would be merged as the products sold by them cater more or less to the same section of the customers, he said.

Moreover, this move will also enable dealers to attain sustainable volumes so as to make their business profitable. Lancer dealerships will, however, continue to be separate, he added.

HM, he said, was in talks with Mitsubishi Motors for expanding its product range. The company, according to him, has the option of going for a small car, introduce a strip-down version of Lancer or go for higher-end models from the Mitsubishi stable. A decision to that effect is expected to be be taken in two months.

The company, he said, was working hard towards increasing the local content in Lancer to 70 per cent from the present 56 per cent which will go a long way in reducing its production cost.

As far as the Ambassador model is concerned, Mr Chaturvedi said the company was embarking on a strategy to make it ``friendly for personal use''. For this, only minor modifications are required, he said while adding that Ambassador ``still has a lot of steam in it''.