Mumbai: Hindustan Motors has sold Ambassador, India's iconic car brand, to French car giant Peugeot SA for Rs 80 crore. Sale of the once ubiquitous car brand comes three years after the company, India's first local car manufacturer, stopped making new units.
"We have executed an agreement with the Peugeot SA Group for the sale of the brand Ambassador, including the trademarks," The Economic Times quoted one CK Birla Group spokesperson as saying. The Group owns the Hindustan Motors company that once churned out the white vehicles.
The company that offered voluntary retirement scheme (VRS) to its permanent employees wants to use proceeds from sale to clear dues of employees and lenders.
Sales of the car crashed to less than 2,500 units in 2013-14 from 24,000 units per year in mid-1980s. Its peak years were 70s when the white car captured 75 per cent of car market share.
However, the advent of Maruti Suzuki 800 in 1983 on the Indian auto landscape brought along with it demise for Ambassador brand. As, by 1990s its market share that had already started on a downward slope saw a steep decline to 20 per cent that means a whopping loss of 65 per cent in short time.
According to a report in Business Standard that cited unnamed executives at Hindustan Motors that lack of funds for plants and innovative designs triggered demise of the brand, once an integral part of India's auto consumers.
Hindustan Motors was set up in 1942 by B M Birla, C K Birla's grandfather. In 1948 the company shifted its plant in Uttarpara in Hoogly in West Bengal for making Ambassador cars. As late as 2014, the company shut its operations at Uttarpara and in 2015 offered VRS to identified employees.
