Peugeot buys Ambassador

Ambassador, the iconic Indian car brand that, till less than a decade ago, carried both the Prime Minister and the common man, is being sold to French carmaker Peugeot. The C K Birla Group-owned Hindustan Motors formalised the deal for Rs.80 crore. Production of Ambassador cars had stopped around three years ago.

It is not clear if Peugeot will use the brand for its cars in India. The Ambassador brand was introduced seven decades ago when Hindustan Motors launched the Morris Oxford series II in a new avatar with minor changes. It quickly became a national icon and continued to dominate Indian roads till the 1980s, when the Maruti 800 exposed its inadequacies.

From 24,000 units a year in the mid-1980s, sales slumped to less than 2,500 units in 2013-14. On May 24, 2014, the inevitable happened when work was suspended at the Uttarpara factory of Hindustan Motors near Kolkata. The Uttarpara plant dates back to 1942, making it the second oldest in Asia after Japanese giant Toyota.

Peugeot had a brief three year presence in India in the mid-1990s, when the Peugeot 309 was assembled and sold by PAL. Last year, Peugeot Citroen announced plans to re-enter India by 2018. The company had earlier this year formed a JV with CK Birla Group for the Chennai plant. The tie-up was to make use of the Hindustan Motors plant in Chennai as its production unit. The Chennai plant currently produces vehicles for Mitsubishi and has a capacity of manufacturing 12,000 units a year.

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