Petrol Stop - Can new Ambassador pull HM out of quicksand?

Can new Ambassador pull HM out of quicksand?

Tuesday, 24 August 2010

23 August 2010;economictimes.indiatimes.com:Anuradha Himatsingka & Rakhi Mazumdar:KOLKATA: KOLKATA: Hindustan Motors last week announced a major overhaul of the iconic Ambassador car in what auto analysts and brand experts see as a last shot at redemption for the car that ruled the pot-holed Indian roads for decades. And not many are excited about its prospects. “It is a spacey car but the technology is obsolete,” says Murad Ali Baig, one of the country’s best-known auto analysts. Modelled on the British Morris Oxford of 1956 and in production since 1958, the Ambassador accounted for three out of every four cars that plied on Indian roads in the seventies before first Maruti Suzuki and then others such as Hyundai Motors and Tata Motors stole the road show with sleek, fuel-efficient and features-rich vehicles. “The Ambassador lost out to the contemporary, trendy and the ‘in’,” says Jagdeep Kapoor, managing director of brand consulting firm Samsika Marketing Consultants. It will be an uphill drive for the Ambassador, or ‘Amby’, to cater to the expectations of the new generation. That is what Hindustan Motors aspires for. It will hire a European design house to help redo the car with “retro design and cutting-edge technology”, says Manoj Jha, managing director of Hindustan Motors. The new car will look different from the current Ambassador, he says. It will cost between Rs 5 lakh and Rs 7 lakh, comply with European emissions standards and hit the roads by August next year. The company wants it to be a niche product and will continue producing the existing model as well. Experts believe this will be the Ambassador’s last chance to survive. “I hope Hindustan Motors knows which design house to select because this might just be the last chance ever for the Ambassador brand,” says Adil Jal Darukhanawala, editor-in-chief of automobile magazine ZigWheels. “Instead of a makeover or lipstick job, what the Ambassador needs is a clean sheet approach to design an all-new car from the ground up,” he adds. But it is not easy task, as pointed out by Mr Baig. The car retains its old suspension, architecture and platform. The only bit of modern engineering it has got is the Isuzu engine. It will cost a minor fortune to overhaul it completely and the company is unlikely to do that, says Mr Baig. What it can do is adopt hydraulic suspension, bring in new gear-shifting technology and improve upholstery and interior design. But, even then, the car may at best go to 2,000 sales per month from 600-700 now, says Mr Baig. That may not be good enough in a market of more than two lakh cars a month. Mr Kapoor of Samsika, however, believes the Amby, loved for its spacious sofa-style rear seats and sturdiness, can still make a comeback if it can be effectively upgraded and marketed. “If the brand wants to rejuvenate itself, it will have to retain its goodwill and the positive attitude and cater to the new expectations of the new generation,” he says. “It can still be Ambassador of the Indian roads provided intangibles such as goodwill, image and attitude can be achieved through repositioning, communication and services.” The Amby relaunch could be a make-or-break move for Hindustan Motors, which posted losses of Rs 43 crore last fiscal and had to inform to the Board for Industrial and Financial Reconstruction as its networth eroded more than 50%. The company, which also manufacture and sell Mitsubishi Motors vehicles such as Mitsubishi Lancer, Cedia and Pajero, has been losing several top-level executives in recent months. Then MD R Santhanam left the company in May, followed by executive vice president Moloy Chowdhury, chief general manager of sales and marketing Ratan Singh and assistant general manager (North Zone) Romesh Lalwani. Only a grand success of the new Ambassador can perhaps pull it out of the red. Now the question is, if Amby can do a Royal Enfield Bullet, which has found renewed acceptability in the country.