West Bengal

Brand Ambassador may yet survive

Print edition : March 17, 2017

The Ambassador taxi stand at Howrah station, Kolkata. The car still retains a nostalgic value for most Indians. Photo: ASHOKE CHAKRABARTY

THE iconic Ambassador car got a fresh lease of life after the French carmaker Peugeot of the Groupe PSA bought the Ambassador brand from Hindustan Motors of the C.K. Birla Group. The Ambassador, which ruled the roads of India, and particularly Kolkata, for more than 50 years, looked like it had reached the end of its long and illustrious journey when Hindustan Motors suspended production at its factory at Uttarpara in Hooghly district in May 2014.

The deal with Peugeot, worth Rs.80 crore, was signed on February 10. “We sold the Ambassador brand to Peugeot, as Peugeot felt that it can utilise the brand better, particularly in the marketing area of its operations. It is good that the iconic brand is coming back to life,” Uttam Bose, director, Hindustan Motors, and former managing director of the company, told Frontline. According to Bose, the Rs.80 crore that Hindustan Motors received in the deal would be spent entirely on clearing the liabilities of the company. “If we do not have the bandwidth to revive (the Ambassador brand), is it not better to keep the brand alive this way? This was an alternative which I think presented a win-win situation,” said Bose. Industry experts feel that the acquisition may prove to be a masterstroke for Peugeot, which has been trying to make its presence felt in the Indian market; for, the Ambassador still retains a nostalgic value for most Indians. For more than 50 years, it was the car that Indians travelled in—from VIPs to the common man. According to Bimal Guha, general secretary of the Bengal Taxi Association, even today there are 23,000 Ambassador taxis plying in Kolkata alone; as late as 2008, the number of these taxis stood at around 35,000 in the city.

Modelled on the British Morris Oxford Series, the Ambassador was introduced in India in 1958 and soon became the most ubiquitous presence in urban India. However, its failure to change with the times finally led to its gradual downward spiral from the mid 1990s. By 2009, production of the car dipped to 5,500 from around 24,000 a year in the mid 1980s.

In February 2014, Hindustan Motors was referred to the Board for Industrial and Financial Reconstruction (BIFR), and three months later the company suspended its production at its main factory in Uttarpara. The factory, set up in 1942, was one of the oldest automobile plants in Asia. By that time the workforce had dwindled to 2,600 from 22,000 (during the heyday of the company), and the accumulated liability of the plant stood at Rs.94 crore.

However, it may not be the end of the road for Hindustan Motors either, said Uttam Bose: “We are also looking at the situation with some of our partners and trying to see if there can be some good news as far as resuming manufacturing is concerned.”

Suhrid Sankar Chattopadhyay