Production of India's Ambassador cars grinds to a halt

Sun May 25, 2014 11:10am EDT
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By Aradhana Aravindan and Sujoy Dhar

MUMBAI/KOLKATA (Reuters) - The maker of the Ambassador has halted production of the iconic car, long the choice of Indian officialdom, citing weak demand and a lack of funds and casting doubt on the future of a vehicle that has looked essentially the same for nearly six decades.

Hindustan Motors Ltd said in a statement it had suspended work at its Uttarpara plant, outside the eastern city of Kolkata, until further notice.

Modeled on Britain's Morris Oxford, the Ambassador was the first car to be made in India, according to the company, and was once a status symbol.

But it 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 on Saturday, 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.   Continued...

Sumitra Sarkar, 35, cleans a yellow ambassador taxi at a parking area along a roadside in Kolkata March 8, 2014. REUTERS/Rupak De Chowdhuri/Files