Peugeot buys Ambassador car brand from Hindustan Motors in a $12 million deal

The parent company of Hindustan motors, the CK Birla Group, confirmed a deal with the French automobile conglomerate PSA Peugeot Citoren (better known as the PSA group). The CK Birla group sold of the iconic Ambassador car in a deal which cost a whopping INR 80 crore.

The CK Birla group issues a statement which read

“Hindustan Motors has executed an agreement with Peugeot SA for the sale of the Ambassador brand, including the trademarks, for a consideration of Rs 80 crore.”

The Ambassador was a very popular Indian car which earned the title of “King of Indian Roads” as at one point in the 20th century, it was the car everyone wanted. Hindustan Motors began the manufacturing of this iconic car in 1958 and modelled it after the very popular British car, Morris Oxford III. In the 1980s when cars weren’t a huge rage, Ambassador was one of the few profitable companies which managed to sell 24,000 units a year as the car was an obvious choice for Government officials. However, after Liberalisation and more companies ushering into the country, the sales of this car fell and in 2013-2014 managed to hit an all time low with just 2,200 units being sold in that financial year. That also led to the shutting down of the Hindustan Motors manufacturing plant as it was grossly unprofitable because it was manufacturing only 5 units a day.



The PSA Group which owns the Peugot and the DS automobile maques struck a partnership with the Birlas to enter the Indian automobile market. The initial investment was around INR 700 crores and as per reports, the French company will sell 1,00,000 vehicles in India each year. This isn’t their first venture as the brand in 1993 sold the Premeir Padmini under a joint venture with Premeir Automobiles India. However, this project tanked because of labour issues and poor dealer service which led to PSA’s exit from the country in 1997.

However, it will be interesting to see what the French company’s future in the country will be after striking a fruitful and reportedly longstanding partnership with CK Birla group. The PSA group looks to gain a strong hold over the Indian automobile market by 2018.




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Author: OOS Team

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