New Rs.5-Rs.9 lakh Ambassador from Peugeot? Huge potential in Indian car market has players scrambling.

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Peugeot SA (PSA) recently purchased the Ambassador brand from Hindustan Motors for Rs.80 crore. PSA and CK Birla Group entered an agreement last month which was the first foray into what the companies describe as a “long term” partnership. PSA has made an investment of roughly Rs.700 crore (100 million Euros) towards establishing a manufacturing unit in Tamil Nadu.

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The iconic Ambassador car may be re-launched at a new price point to target the highly contested Rs.5 lakh to Rs.9 lakh segment which already is home to some of the best sellers like the Swift Dzire, Hyundai Xcent, Honda Amaze, Volkswagen Vento, etc.

Since PSA has only purchased the brand and not the Ambassador manufacturing plant in Uttarpara, West Bengal, the company could redesign and re-launch any number of variants of this iconic automobile.

PSA and other international car manufacturers are scrambling to enter the Indian market, which is set to reach 8 to 10 million cars by 2025. Recently, Toyota announced its intentions to enter an agreement with Maruti Suzuki to trade R&D advancements, hybrid fuel technology, driverless technology, etc. for the latter’s wide distribution network and market outreach.

Peugeot has big plans for the iconic Ambassador, and will not use it merely as a segue into the Indian market as indicated by Rajeev Shah, Managing Director and CEO of RSBA Advisors, the financial advisory firm that advised HM to sell the Ambassador brand to Peugeot. Mr. Shah says that “Every year, 40-50 models of passenger vehicles are launched in India. The Ambassador brand, on the other hand, is deeply ingrained in the psyche of consumers. Peugeot would like to make it the Rolex of cars.”

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