Adieu Ambassador – French automaker Peugeot now the proud owners

PSA group aims at long road in India

Business & Politics

News - Biz@India

February 13, 2017

/ By / Kolkata



PSA Group will hold 80 pc of the manufacturing venture, primarily producing cars in Tamil Nadu

PSA Group will hold 80 pc of the manufacturing venture, primarily producing cars in Tamil Nadu

Seven decades of nostalgia versus the eventual urge to survive; Ambassador, the car that defined a class in India is now compulsively a French affair.

Putting it straight, Hindustan Motors have sold Ambassador to the renowned automakers of France Peugeot for INR 800 million (EUR 11.2 million). In an official statement, the CK Birla Group has announced that the otherwise meagre amount will be used in clearing salaries and dues. The PSA Group, the parent body of the Peugeot returns to India after two decades as CK Birla Group joined hands with the European automakers in a deal that plan to make and sell cars in India. According to the recent clarification by the French car maker, it is yet to decide on the exact brands and products that it will manufacture and launch in the Indian market.

Adieu Ambassador

The classic four-wheeler that was once dominated the less-crowded Indian roads was mostly used by the elites in the country.  Once regarded as the ‘King of Indian Roads’ the Hindustan Motors started manufacturing the iconic Ambassador inspired by the British four-wheeler Morris Oxford III. Uttarpara, a plant near Kolkata used to be the hub of the Ambassador that used to sell around 24,000 units every year in the mid-1980s. The disappointing run started and persisted since the mid-1990s with the advent of Maruti Suzuki. Ambassador had to take the back seat when compared to the modern foray of cars getting introduced on the Indian roads after that.

It was 2013-14 that witnessed the all-time low sales figure of the Ambassador with only 2,200 units making it to the roads. The company shut down production soon after that and the nostalgic journey of the Ambassador now reaches its culmination with the befitting French affair that commences from Friday, last week.

Ambassador remains faithful to the capital of West Bengal, as one can still witness the bright Yellow Taxis in the by lanes of Kolkata augmenting the melancholy of the archetypal Indian means of transport. It is now a more like an Indian transport that reminiscences the golden past and a medium for tourists and story-seeker to comprehend and perceive. However, whether the French motor concern has plans of refurbishing the legendary Indian car or will it get a remodelled look is still under speculation. Moreover, reviving the closed factory is something that CK Birla might consider in the future, but the present mood loitering about the locked gates of the Uttarpara factory is rather gloomy.

PSA looks to future

Planning to penetrate the growing Indian automotive market, the PSA group has expressed strong intent of entering a long-term partnership with its Indian counterpart. A statement from the French company said that they would like to participate in the growth of the Indian market, which is expected to reach 8-10 million cars by 2025 from the current 3 million in 2016.

PSA looks at an initial manufacturing capacity of about 100,000 vehicles per year and will be followed by incremental investment to support a progressive ramp-up of the long term project. The manufacturing capacity for power-trains will cater to the domestic market needs and global Original Equipment Manufacturers (OEMs). The performance of the industrial set-up will be supported by a significant level of localisation, in order to reach the necessary cost competitiveness.

The signature ceremony between the two newly found partners was held in Paris in the last week of January. With a strategic growth plan ‘Push to Pass’, the PSA Group said that it will follow the route of ‘Be Indian in India’ as their primary outlook in India.

Commenting on the agreements, Carlos Tavares, Chairman of the Managing Board of PSA Group said, “Benefitting from the strong support of our Indian partner, the CK Birla Group, and a shared vision, this project is consistent with the strong execution of our ‘Push to Pass’ strategic plan and represents a major step in PSA Group’s worldwide profitable growth in key automotive markets.”

Speaking to the press in Paris at the significant signing ceremony, CK Birla, Chairman, the CK Birla Group, said, “We have embraced ‘Make in India for India and the World’ for several decades and are among the early adopters of frugal manufacturing in the country. I am confident that the coming together of the latest state-of-the-art technology from the PSA Group and the engineering and manufacturing excellence of the CK Birla Group will benefit the automotive sector in India.”

The glorious run of seven decades might seem to have reached an unbefitting end; however, the Indian automobile market can hope to see another change of era with this new partnership. While Peugeot returns to India after a bad patch with Fiat, the likes of Suzuki (Japan), Hyundai (South Korea), Volkswagen (Germany), Ford (America) and Toyota (Japan) will soon have a new competitor. With the rising middle class income in India and car sales figure rising every year, does the compelling return of the Ambassador sound like a poetic justice?

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