Ambassador Brand changes hands from Hindustan Motors Sells To Peugeot S.A for Rs. 80 cr

Hindustan Motors Ltd., India’s oldest carmaker, has sold the Ambassador brand and other ancillary rights to French automaker Peugeot S.A for an ornamental sum of Rs 80 crore. The news was confirmed through a filing made to the Bombay Stock Exchange Ltd. on Friday.

Hindustan Motors said in the BSE statement filing:

“Hindustan Motors has executed an agreement with Peugeot SA for the sale of the Ambassador brand, including the trademarks, for a consideration of Rs 80 crore”

The initial manufacturing capacity will be set at about 1 lakh vehicles per year and followed by incremental investment to bolster an impressive run-through of the long-term project.

Downhill Ride for Ambassador

The Hindustan Ambassador was discontinued in 2014 as sales slipped down consistently. Moreover, it could not mount at par with the new generation of cars in the Indian market. In the 1980s, 24,000 units of the car were sold every year, whereas the annual sales plummeted down to an average of 6,000 units in the 2000s.

Hindustan Motors cited more reasons than one for shunning production of Ambassador cars. Some of the prime reasons included, low productivity, growing indiscipline, critical shortage of funds, lack of demand for its core product the Ambassador and large accumulation of liabilities.

The group focused on a come-back India in 2011. It also laid foundation of a factory in Sanand, Gujarat, but renounced the plan in 2014 citing financial troubles as the prime reason of shunning the concerned factory.

Glorious history of the Ambassador

The Kolkata-based automobile maker, Hindustan Motors ushered the Ambassador in 1954 as the Hindustan Landmaster. This car replaced the Hindustan Ambassador Mark-1, the first car to be built in India at a plant in Uttarpara near Kolkata.

Post it’s launch, Ambassador didn’t take any time to engender a rage in the masses. He also bagged the tag of government’s preferred car. Concisely, Ambassador was known as nothing short of a status symbol.

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