I have selected HINDUSTAN MOTOR for this project. HINDUSTAN MOTOR was founded on the year 1942.

The founder was B. M BIRLA and the CEO of the company was MR. PRAKASH SAHU. Headquarter is on West
Bengal (UTTARPARA)
Hindustan Motors is an Indian automotive manufacturer based in Kolkata, West Bengal, India. It is a part of
the Birla Technical Services conglomerate. The company was the largest car manufacturer in India before the
rise of Maruti Udyog.

The famous product of HM was Ambassador which later on emerged as a new segment called TAXI in
KOLKATA. It was also an emotion of KOLKATA.
Hindustan Motors Limited (HML) was India's pioneering automobile manufacturing company. It was
established, in 1942 by B. M. Birla of the industrialist Birla family in collaboration with Lord Nuffield of Morris
Motors, who were already selling their cars in India. Commencing operations in a small assembly plant in Port
Okha near Gujarat, the manufacturing facilities later moved to Uttarpara, West Bengal in 1948, where it began
the production of the Morris-designed Hindustan Ambassador. The HM-Mitsubishi Motors Plant is in Chennai.

What went wrong with HINDUSTAN MOTOR and with its iconic ambassador:
Ambassador was also the first car to be built in India just after a decade of independence. Towards the end of
its lifecycle, the Ambassador failed to keep up with the technology, comfort and there existed better cars on
roads and declining sales led Hindustan Motors ceasing the production of the Ambassador.
Some valuable reasons for downfall of the HM:
HM never considered modernizing their models.
The car which was once a status symbol is now
limited to the commercial cabs in Kolkata. The
ride-sharing services like Ola and Uber with their
comfy sedans and hatchbacks are gaining the centre
stage, pushing the iconic yellow cabs in the city. The
car lacked modern machines and the spare parts are
hardly available in the market. The company
continued cherishing to their past glory while being
totally reluctant to compete with the immediate
players, both international as Tata. Just because the
car was once popular, it would continue to grow
even now. Birla was a visionary, but the
contemporary members of the company are not
certainly. The car had to bid goodbye for lagging
behind others in the changing market sector.
1)Poor marketing strategy – While other vehicle
manufacturers have their marketing departments
who promote their products on social networking
sites, radio, TV, magazines, etc. with witty taglines
and interesting information, HM officials were busy
sleeping. The company never even tried to take any
efforts to market the Ambassador. They expected
the product to sell on its own and poor marketing is
a sure shot recipe for any product’s failure in today’s times.
2) No major updates – The HM Ambassador never got any major updates in the past 50-odd years. While the
overall design remained the same with small redesigned parts added every now and then, the product was still
considered old and very rightly so. The Amby came with no technology at all and the management from
Hindustan Motors never took competition into consideration. They still felt that the Ambassador has no true
rivals.
3) No good engine options – Hindustan Motors had a partnership with Mitsubishi in India. Mitsubishi is known
for its amazing driver-oriented vehicles and it would have been very wise had HM borrowed some knowledge
from its Japanese business partner. Mitsubishi has some great engines on offer and the Amby really deserved a
new and modern engine that would provide good performance as well as fuel efficiency.
4) High pricing – The Ambassador was priced between Rs. 5-8 lakhs depending on the variant. Come on HM,
the Amby is on sale since 50 years so we are sure that the company must have recovered all the development
and infrastructure costs for the factory long back. Not a lot of money was being invested in the product’s R&D
and yet the company showed us how profit-hungry it is by not reducing the prices of the retro car at all. There
was really no justification for the price that the sedan commanded since no money was being spent on
marketing as well.
5) Not creating a new customer base – The HM Ambassador was mostly bought by politicians and ministers
who loved the comfort of the car. Ambys with ‘laal-battis’ are still a common sight in many parts of the country.
Another segment that loved the vehicle was the taxi segment. While Mumbai doesn’t have any Ambassador
taxis any more, cities like Kolkata still make use of the iconic car as cabs. Hindustan Motors never felt the need
to modernise the car and cater to a completely new and different segment of customers. It seems they were
really happy with the limited sales of the vehicle. The end result is here now for all of us to see!
Just because a vehicle is termed as iconic doesn’t really mean that you sell it without taking any efforts. Even
the Volkswagen Beetle and MINI are iconic cars, but look how they have been modernised to keep up with the
present day customers’ requirement. The new Beetle and MINI do carry some of their retro styling elements,
but overall they are completely new cars coming with modern engines, latest technology and all the safety
features too. Now this is how true iconic cars are revived and HM should have learnt something from them.

The company blamed low sales of the car along with high losses for shutting down the factory in Uttarpara,
West Bengal. Somewhere it was the manufacturer’s fault too, when they kept selling something without any
updates, zero marketing, poor technology and still expected things to run fine.

Personal visit and try to find out the failure story of HM:

I personally visited the Uttarpara (Hind Motor) factory and talked with the local person and luckily I met a
person who was the worker of that plant. I asked him what was the conditions and situation of the company
for which it was totally in a shutdown stage.
He said that the at the year of 2003 , month of feb company announced that all employees can take
volountary retirement and the last date was 31 st March 2003.At that time 5463 employee was released on
31 st March 2003.
The management was very poor, no new thinking or upgradation with the time was not there. There was 2
section one is Ambassador and another one is Heavy engine sections, both the sections production was
slowed down.
HM have Chennai factory, one Indore factory where it was specially for engine, and another in Uttarpara
factory west bengal.

Reopening of HM:
Hindustan Motors, are planning to collaborate with a European electric vehicle manufacturer. The plan is to
produce electric cars , the two companies have signed an agreement to seal the partnership ,the collaboration
will be on a 51:49 ratio, where the controlling stake will be with Hindustan Motors.
Ambassador is all set to make a comeback in the coming two years in a new avatar. (HMFCI), an associate company
of the CK Birla Group will introduce the Ambassador with a new engine and design. According to Reuters, the new
Ambassador will be manufactured at the Hindustan Motors’ Chennai facility. New Amby will launched at 2024.
So our Ambassador is coming in a new avatar. Kolkata emotion is coming again.
Recommendations:
 As a strategic manager I want to say that marketing strategy should be improved.
 Updation is required in all section specially the model and engine, in respect of today’s competitors.
 Options of electric vehicle should introduced or launced.
 We have to take a note on pricing as per market.
 Company’s management must take care on the political issues that no conflicts should be there in between
the employees.
References:
1. Newspapers: Times of India, The Statesmen
2. Google
3. Personal Visit