Maker of Ambassador cars inches closer to be reborn as EV maker

Hindustan Motors had shut its facility in Uttarpara, West Bengal, in 2014 due to a lack of demand for its iconic Ambassador cars. It now plans to retu
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File photo of Hindustan Motors facility in Uttarpara, located near Kolkata in West Bengal, before it was shut down in 2014.
File photo of Hindustan Motors facility in Uttarpara, located near Kolkata in West Bengal, before it was shut down in 2014.

Hindustan Motors, once famous for its iconic Ambassador cars, is set to return as an electric two-wheeler manufacturing company soon. The carmaker, owned by industrialist CK Birla, is closer to its rebirth after finalising its proposed electric two-wheeler project in collaboration with a European partner. Both companies have completed their financial due diligence. The duo will now start finalising the technical aspects of the joint venture which is expected to take another few months. Hindustan Motors is expected to formally return to the Indian market some time next year and will restart its facility located in Uttarpara, near Kolkata, in West Bengal.

News agency PTI quoted one of the officials from Hindustan Motors (HM) saying, "The due diligence between HM and the European company is now complete. The name of the foreign partner will be announced shortly." Currently, the two companies are busy to finalise the structure of the joint venture, including the proportion of equity to be held by each company. The entire process is expected to completed by February 15 next year. After officially forming the joint venture it will take around six months to start the pilot run of the EV project.

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According to the HM official, the two companies will put around 600 crore at stake as initial investment for this upcoming electric vehicle project. As of now, the investment is only for electric two-wheelers. A decision to re-enter the four-wheeler space will be taken later. "The EV two-wheeler would be manufactured on 98 acres of land at the Uttarpara plant after modernisation, as it is lying defunct for several years," he said.

Hindustan Motors had shut down the plant eight years ago which had around 2,500 employees working at that point of time. The carmaker decided to stop production due to ‘low productivity, growing indiscipline, critical shortage of funds, lack of demand for its core product, the Ambassador, and large accumulation of liabilities’.

Ambassador, which once was the first choice as official car for bureaucrats and politicians, can still be seen in use as taxi in cities like Kolkata. It was modelled on Britain’s Morris Oxford, and was the first car to be made in India. HM had sold around 2,200 units of Ambassadors in the last financial year before it decided to shut operations in March, 2014.

First Published Date: 28 Oct 2022, 10:42 AM IST
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