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Recently the good old Ambassador was in the news that the brand owners - Hindustan Motors is planning to relaunch /rejuvenate this heritage brand. Both the brand and company is in deep crisis with HM posting losses of Rs 43 crore last year and its networth declining by about 50%. The company plans to relaunch the Amby in a new look and is planning to entrust a design house with the task. The report also suggest that the new Amby will have a retro- look and will be in the price range of Rs 5- Rs 7 Lakhs. The new Amby will be a niche product. The interesting question is can this brand be saved with the new strategy ? From the report about the new Amby launch, it will be tough for the brand to regain its lost glory if the brand is going for a niche variant. According to Economic Times, Ambassador sells around 600 units per month in a market of 2 lakh cars/month.
Ambassador is now in a rut which is its own creation. The brand is the classic example of marketing myopia. The company took the customers for granted and refused to change when the entire market changed. The brand did nothing when faced with competition from Tatas and Maruti. Instead of changing its core DNA, the brand relied upon cosmetic changes. When the brand needed a drastic revolutionary change, HM decided to get stuck with the old product. The current strategy of a niche Amby is again a patch-up . This brand cannot survive on patch-up strategies. I don't think that the core brand Ambassador will revive with the launch of a niche high priced Ambassador. With the brand equity in shambles, how can the brand expect consumers to pay a premium for the new Amby variant ? The high priced Marquee variant will work for iconic brand which are facing a decline. But Ambassador was not an icon. It was a market leader and consumers bought the car because they did not had a choice. Not because they were a die-hard Amby fan. Hence a high priced niche variant may not revive the sale of Ambassador. Secondly HM as a company is now relying its future on Ambassador which again is a flawed strategy. A weak brand cannot save a weak company. And a niche variant will at best give some life support and not survival. Another way to look at the current strategy is the transformation of Amby from a mass market car to a niche product. So instead of trying to sell large volume of Ambassador, the
such a task is virtually impossible. Still people bought because there was no choice. The relaunch re-ignited the existing goodwill . In such a market why not come out with an entirely new brand with a proven engine ? Although building new brand is expensive compared to rejuvenation of old brand. The brand should go for radical redesign and more importantly it should disrupt the market. Ambassador is known for its space and rugged nature . Having said that. Why didn't it think about an entirely new brand ? The trend in the Indian auto market is that multiple brands from different companies sporting the same engine. For Amby.company hopes to sell high-end variant and hence generate more cash. In that perspective. in Amby's case. HM is again going for short-term strategy in pursuit of long-term results. what it need is disruption. there are chances of getting accepted by the market. it seems to be the end of road . So if Amby wants to play the volume game. the hope of renewal from a niche product seems too optimistic. Disruption should happen both internally and externally. Ambassador comes with a lot of baggage and perceptions which is difficult to change.The product is also infamous for nagging problems and poor build quality. But the question is whether the brand has enough equity to support such a variant. Indian market has seen consumers embracing products with exceptional quality and/or utility. For such a product. The engine becoming commoditized and design gaining prominence. Brands like Beetle and Enfield revived because these brands had strong equity existing in the market even after its previous life. But such a goodwill does not exist for Ambassador. So if the new variant is exceptional. A diesel car below Rs 4 lakh can ignite interest in the brand but given the cost scenario. . the launch of a high priced Amby make sense. it needs to offer consumer something they cannot refuse. The current price to value proposition of Ambassador is negative compared to the competitors like Indica . If Ambassador wants to stay relevant as a brand. Another interesting aspect of this issue is about the reliance of HM on Ambassador brand for its survival.
rounded body and a big bonnet were there.000 cars each year. With Puducherry leather upholstery and cloth from New Delhi’s Karol Bagh and old Delhi’s Chandni Chowk. mostly in the eastern and southern parts of India. at every taxi stand. This is not your grandfather’s Ambassador. the manufacturer of one of the world’s oldest cars. and still do. The first Ambassador car. Hindustan Motors even rolled out a special model to celebrate its 50th anniversary. where he took the car. modelled after the Morris Minor. rolled off the assembly line as the first truly Indian car Status: This sturdy behemoth continues to thrive in smaller towns and is also popular with the minority wishing to make a “retro” statement in the cities Brand story: The car that won’t die has also become a brand that won’t die. about a quarter ferry government employees and the remaining 15% are for the retrochic and nostalgic customers. spaciousness and comfort factor made it the most preferred car for generations of Indians till sleek. power steering and mobile chargers. Earlier. The Ambassador’s dependability. And its brand ambassadors ranged from the Prime Minister’s motorcade to the kali-peelis (black and yellow cabs) that stood. Hindustan Motors.Born:1957 History: Owned by the C K Birla-managed Hindustan Motors Ltd. The bulging headlights. he turned it into a fashionable symbol of eclectic India. gutted. . and then rebuilt it. sells about 13. fashion designer Manish Arora—himself the owner of a black “Amby”—hosted a special on Discovery Travel and Living. but there were also many new features—reflecting changing consumer preferences and a refusal to die. but features bucket seats. powerful beauties took over Indian roads. Most spend their lives as taxis.
which we hope to get by end November. . We sell only 17 per cent of the Ambassadors produced to the central and state governments. Apart from taxi operators. We have already launched the Harit series Euro II complaint Ambassador cars: the CNG 1800 cc version in 2000 and 1500 cc in July 2001. especially for long distance journeys. is facing the toughest challenge of his career — changing the fuddy duddy image of the Ambasssador. Ambassador markets are concentrated in five states which are West Bengal. Contessa and the Trekker.'We will be the first with an LPG car' ET Interactive / G L REDDY. Tamil Nadu. the company's Uttarpara unit produces 18. HM's Vice President. This will make Hindustan Motors the first to launch the LPG version car when LPG auto fuel dispensing units come up in the next three to four months. On an average. And also the ubiquitous old warhorse. In the traditional markets. as and when the policies are in place and the norms laid down. The balance are sold to non-government segment. Ambassador. marketing. safety and luxurious space. 10. who are your main customers? Taxi operators in India. It is a myth. it has been observed that most foreigners visiting India prefer only Ambassador because of its ethnicity. We have definite plans to make inroads in the Mumbai taxi segment with our CNG versions. There are approximately 6 lakh passenger car taxis in the country. if it does. only 20-odd cars or less will be manufactured every month against a production of 400 Contessa cars every month earlier. Even today. Besides. quasi-governments. The running cost for the customer compared to any other petrol car of similar price band (Rs 4. Some call it a jalopy still on Indian roads.22pm IST C K BIRLA'S Hindustan Motors Limited (HM) makes the Mitsubishi Lancer. What is the marketing strategy being adopted for Ambassador? For various historical reasons. Therefore. The car is still the first choice of many taxi operators though they need to keep some other brands also to keep their clientele intact. Kerala. Does Ambassador have an image problem? Many people in India wrongly think that Ambassadors are being purchased only by governments. Ambassador CNG cars have over 90 per cent market share in the Delhi black and yellow taxi segment. In the non-government segment. He talks to Anuradha Himatsingka on the Ambassador of the `future' and the HM strategy. The 2000 cc diesel Ambassador with AC will give a fuel efficiency of over 12-14 km per litre of diesel working out to Rs 1.000 Ambassador cars per annum. of which over 60 per cent are Ambassadors. Chennai Call Taxi Pvt Ltd has recently purchased 108 radio diesel taxis. because it never stalls or. Any other changes being planned in this fiscal? We are launching a new variant of the 2000 cc diesel Ambassador with moulded roof liner and power steering. our marketing strategy largely revolves around consolidating our share in these strong markets especially in the taxi segment and penetrating into new markets like the north and the western states. Do you intend to phase out the Contessa model being manufactured at Uttarpara? We plan to keep the car as a niche product for die-hard Contesssa fans.75 lakh) will be far lower. THE ECONOMIC TIMES Nov 25. We have also developed LPG versions of the Ambassador and applied for Automotive Research Association of India (ARAI) approval. taxi operators rely on the Ambassador. On the contrary. G L Reddy. Do you plan to have the necessary products for Euro III and Euro IV in place or will you wait and watch? We will set the ball rolling.30 per km. public sector units etc. who else prefers Ambassador cars? People who have already achieved their goals in life look at the Ambassador. We do not intend to make any fresh investments on the product. 2001. Andhra Pradesh and Orissa. can be easily serviced as spare parts are available even in the remotest parts. we consider replacement of old Ambassadors with new Ambassadors as an important marketing tool.
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