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Ambassador cars in top gear

Kolkata, Mar 22 () : Ambassador and Fiat were the two cars that were the face of the Indian automobile industry till the foreign players came in. The good news is that the Ambassador has clocked a 166% growth when others are in the decline mode.

Like Mumbai’s taxi fleet that uses Fiat, Kolkata taxis are Ambassadors. With the support of the West Bengal Government and a new MD Bose, the Hindustan Motors owned by Birla is making a comeback with cars coming out steadily from the Uttarapura plant. The new MD who comes from Hero Motors is now based in the plant and not in the landmark Birla building.

Hindustan Motors’ sales is driven by Ambassador whose golden period was before 1995. It then sold 18,000 cars annually. The sales dwindled as auto major giants came in with their latest models to capture the passenger vehicle market.

The Indian Ambassador was reduced to being the choice of taxi operators. Here again the Indica and air-conditioned Indigo variants emerged as these models were tailor made for the taxi market. In 2011-2012, the sales fell to mere 2500 cars. Hoping to cash in on the commercial vehicle sector, it concentrated on Veer, a 0.8 tonne. This too did not do any good.

The company got a breather from West Bengal as it put on hold the rolling out of BS IV norms which were to be implemented in 2010. The Government allowed the Ambassador fitted BS III variants to be sold in replacement market since the BS IV engine will be ready in June next year. This year in January it sold 748 (double the sales in the same period last year) and February, it sold 826 cars treble of what it sold last year in the same period.

The new MD decided to go back to marketing Ambassador and it spread out to Bihar, Orissa and North-East States and added 20 more dealers in this region. The quarter ending December 2012 showed a profit of Rs 21 crore for the first time.

Yet another move that gave returns was the slow shift from taxi market and today the sale of Ambassador as taxi is only 25 % while it was 40% earlier. The company also tied up with banks to offer car loans.

Next on the cards is to demerge its Chennai plant from Mitsubishi and make it a part Hindustan Motor Finance company Ltd. This plant manufactures Pajero, Outlander, Cedia and Montero. At present, only 40% of the capacity is used. After the demerger it hopes to tie up with other auto majors to offer the plant to make their models. Japan’s Izusu is in talks to make pickup trucks with the company at the Chennai plant.