The CK Birla Group-owned Hindustan Motors (HM) is selling the Ambassador brand to French car-maker Peugeot for Rs.80 crore.
The Ambassador, whose production ended some three years ago, is one of India's most iconic car brands.
The news comes after Peugeot recently announced its return to the Indian car market by next year.
Peugeot has formed a joint venture with the CK Birla Group.
Hindustan Motors sells Ambassador car brand to Peugeot
Ambassador was one of India's most iconic cars
Till less than a decade ago, the Ambassador cars carried both the Prime Minister and common man alike.
The Ambassador was a variant of the Morris Oxford and introduced in India seven decades ago by HM.
It became a national icon and was an inseparable part of India's urban landscape.
However, the Ambassador couldn't withstand competition from newer vehicles leading to its demise.
11 Feb 2017
Peugeot's presence in India
In the mid-1990s Peugeot had a brief three-year stint in India when the Peugeot 309 was assembled and sold here.
In 2016, Peugeot Citroen said it would re-enter India by 2018.
Peugeot has now formed a joint venture with CK Birla Group and would make use of the Hindustan Motors Chennai plant as its production unit.
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The demise of an icon
Sales of the Ambassador declined from 24,000 units a year in the mid-80s to less than 2,500 in 2013-14. This prompted HM to suspend production of the car at its Uttarpara plant.
Peugeot's India plans
Peugeot might resurrect the Ambassador to crack Indian car market
Peugeot hasn't officially revealed what it plans to do with the Ambassador brand.
Peugeot reportedly plans to manufacture cars at HM's Chennai plant and launch a new line.
It could revive the Ambassador brand by using one of its existing modern car platforms.
If Peugeot can resurrect the Ambassador while retaining its nostalgia, it may successfully enter the challenging Indian car market.
14 Feb 2017
Hindustan Motors continues to explore opportunities despite Peugeot deal
According to a Hindustan Motors spokesperson, the company is in talks with potential partners for reviving its manufacturing unit in Uttarpara.
The sale of the Ambassador brand to Group PSA is expected to pay off workers' dues and settle liabilities with lenders.
The deal for selling the brand along with its goodwill was worth Rs. 80 crore.
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