If new Ambassador EV is launched, will it sell well?

Hindustan Motors (HM), maker of the once-ubiquitous Ambassador that had gone into oblivion, is planning to recharge itself with an electric vehicle (EV) foray, and maybe soon we will see an Ambassador e-car, but the big question is, will it sell well?

HM has tied up with a European auto company in the electric vehicle space. A pact has been inked and due diligence could take around 2-3 months.

The iconic Ambassador.

“Initially, the project will roll out two-wheelers and then we will foray into four-wheelers,” said Uttam Bose, director at HM. According to Bose, the initial investment would be to the tune of Rs 300 crore (Rs 3 billion).

So, if an Ambassador EV is planned, it could hit the roads after a few years. First, only two wheelers will roll out. 

The new Ambassador EV could look
something like this -- Source: Cartoq

It may also be possible that the C K Birla-owned HM will offer a stake (in HM) to its European partner with which it is setting up a joint venture (JV).

According to Bose, the talks focused around a 51:49 JV where HM would have 51 per cent stake. But he added that the equity pattern could be altered, saying it will be evaluated.

This joint venture would give a fresh lease of life to HM’s Uttarpara plant in West Bengal which had closed down in 2014. The revival of this factory would mean work for thousands.

The West Bengal unit was shut because of “low productivity, indiscipline, funds crunch and lack of demand for products,” the management had said then.

The Uttarpara plant headed for closure with a drastic fall in sales of the Ambassador, which had slowly gone into oblivion.

Ambassador’s fall began when Maruti Suzuki rolled out the Maruti 800 in 1983. Between 1984 and 1990, the Ambassador’s market share plummeted to 20 per cent.

Then, global automakers came to India, and ultimately, sent the Ambassador into oblivion.

According to a news report, the Ambassador could return to India in about two years and may be produced at HM’s Chennai factory.

If the new Ambassador comes in an EV form and looks like the car (picture above) in black, it could be pretty steeply priced, that is, above Rs 15 lakh (Rs 1.5 million). This may be on the expensive side.

Ambassador’s customers generally belong to the middle class and such a pricing could wean them away from buying the once-iconic car.

Generally, people who line up to buy cars priced above Rs 15 lakh prefer SUVs or the likes of Honda City or Civic.

There is buzz that HM and French auto giant Peugeot are working on the engine and design of the Ambassador. So, we can expect some major redesign.

Never know, HM may even want to place the Ambassador EV in the premium segment by pricing it over Rs 20 lakh (Rs 2 million). The black car in the photo above surely looks like a premium offering. 

However, if there is not much of a redesign, the new Ambassador would be unattractive to buyers.

So, if an Ambassador EV is launched, for it to sell well, HM will have to do two things — a proper balancing act on pricing and go for a mega redesign.