Hyderabad: Hindustan Motors has announced the Lancer Freedom initiative, which comprises a three-year and 50,000 km extended warranty offer on its Lancer cars.

The company is also planning to come in with a number of new launches and expects to increase sales by 20 per cent this year.

S.C. Gupta the chief general manager of Hindustan Motors and head of the Chennai plant addressing a press conference here said, "Based on customer feedback we have brought in several changes in the Lancer and made it more user-friendly and comfortable. The three-year warranty offer is aimed at building customer loyalty and also assure them about the reliability and the confidence we have in the Lancer range."

Gupta said independent segment-wise research on the maintenance cost of vehicles has revealed that on an average a mid-size car buyer spends about Rs 36,000 over three years on maintaining his car. He said the Lancer Freedom initiative, announced by the company enables customers to saves on these costs.

Hindustan Motors hopes to increase its sales from 4,000 cars in 2003-04 to 5,000 cars in 2004-05 an increase of about 20 per cent based on the launch of three new models, including the Invex range.

"There was no model fatigue with regard to the Lancer and the sedan is amongst the latest offered anywhere in the world. Unlike other counterparts, we have still maintained the indigenisation level at about 67 per cent, as Mitsubishi is very stringent on the quality of cars. Even now, the steel used for the car is imported," he said.

The company sold 150 units of the Pajero last year the other model HM sells from the Mitsubishi stable and expects to sell 300 to 350 of these high-end SUVs this year.

The company is Announcing its new expanded dealership here, Mr Gupta said, "the company has three dealers in the State and about 42 in the country. Apart from the existing 42 Mitsubishi dealers, we are in the process of expanding this network to about 50 by the year-end."

HM launched the Invex with intelligent Man-o-Matic technology earlier this year. Having sold 3,000 Lancers in 2003-04 it expected to increase its sales 4,500 cars in 2004-05 backed by its new offerings Invex and the newly launched economy range of models. The company has now scaled down its target to an increase of 20 percent in sales indicating that the Lancer is not selling as well as expected.

About 80 per cent of Lancers sold are of diesel versions.

HM sold 4,500 Lancer models in 2002-03. Lancer's sales slowed down in 2003. In October of that year the price of Lancer GL was slashed by Rs 70,000 to boost sales. The cut price variant was offered with manual roll-down windows at Rs 6.5 lakh.

Earlier this year HM also announced launching a new model in the executive segment from the Mitsubishi stable expected to hit the road in a year's time.