October 24, 2014
Weak demand halts production of India's iconic Ambassador car
The maker of the iconic Ambassador has halted production of the car that was long the choice of Indian officialdom, citing weak demand and a lack of funds, casting doubt on the future of a vehicle that has looked essentially the same for more than five decades.
Hindustan Motors Ltd said in a statement that it had suspended work at its Uttarpara plant, outside the eastern city of Kolkata, until further notice.
Modelled after the British Morris Oxford, the Ambassador was the first car to be made in India and was once a status symbol, but began losing its dominance in the mid-1980s when Maruti Suzuki introduced its low-priced 800 hatchback.
It lost further cachet and market share when global automakers began setting up shop in India in the mid-1990s, offering models with contemporary designs and technology.
The Ambassador has remained the choice of a dwindling share of bureaucrats and politicians, usually in white with a red beacon on top and a chauffeur at the wheel. It is also still in use as a taxi in some Indian cities.
In a statement, Hindustan Motors cited "worsening conditions at its Uttarpara plant which include very low productivity, growing indiscipline, critical shortage of funds, lack of demand for its core product the Ambassador and large accumulation of liabilities."
The company sold about 2,200 Ambassadors in the fiscal year ended in March 2014, a tiny share of the 1.8 million passenger cars sold during the year in India, according to industry data.