Tuesday, 14 February 2017

Ambassador brand falls under the hammer

Hindustan Motors, owned by the C K Birla Group, has sold the Ambassador brand name to Peugeot SA in a the deal closed last Friday and said to be worth Rs 80 Crore. Production of Ambassador cars stopped around three years ago.

 "We have executed an agreement with the Peugeot SA Group for the sale of the brand Ambassador, including the trademarks. We intend to use the proceeds from the sale to clear dues of employees and lenders," a spokesperson for the group said.

It may be recalled that last year Last year, Peugeot Citroen announced plans to re-enter India by 2018. The company earlier this year formed a joint venture with CK Birla Group for the Chennai plant.

The tie-up aims 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. It is unlikely now that the plant will be making the same vehicle.

The Ambassador brand was introduced seven decades ago when Hindustan Motors launched the UK-designed Morris Oxford series II but with minor changes.

It quickly became a national icon and continued to dominate Indian roads till the 1980s, when the Maruti 800 served to exposed its inadequacies.

From a production tally of 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 Hindustan Motors’ Uttarpara facility which dates back to 1942, making it the second oldest in Asia after Japanese giant Toyota.

At this juncture, it is unclear if Peugeot will use the Ambassador brand for its cars in India.

Peugeot had a brief three-year presence in India in the mid-1990s, when the Peugeot 309 was assembled and sold by PAL. 

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