WHY DID AMBASSADOR FAIL?
Hindustan Motor had failed to make significant innovations over a
period of four decades and the changes that were made can at best be
described as cosmetic in nature with the car retaining same built and
looks. On the other hand Hindustan Motor’s competitors launched many
innovative products every year. The people shifted to the Company’s
competitors at a rapid pace and sales of the Company started declining at
a time when those of the others were growing.
As more cars came to the Indian market, the Ambassador didn't find a
category to fit in, it was too big for a Hatchback and too small to be
called an SUV.
From a status symbol to a taxi. It was a status symbol for people using
the official car – a fact that could have been used to create a strong brand
perception. And as time passed there were only three colors an
ambassador could be seen sporting -- black and white with a red light or a
yellow taxi.
Poor marketing strategy –
zHindustan Motors did not invest much in brand building and advertising
whereas its rivals had huge budget for these activities. As a result
Ambassador had a poor recall value.
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.
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.
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.
Poor employee productivity and excess staffing also hurt Hindustan
Motors. West Bengal where the major Ambassador plant was located was
notorious for low productivity and extreme trade unionism. Productivity
at Hindustan Motors was way below the industry standards. The fact that
its plant and machine was over five decades old and Company had not
made significant investments on upgradation also affected the quality of
the product. As a whole low productivity, excess staffing and obsolete
plant and machinery pushed up the production costs significantly.
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.
DISADVANTAGES OF AMBASSADOR
Difficulty in handling pedals
Uncomfort for the driver sitting
Outdated body style
Expensive spares
Low mileage
Non AC
Non-availability of trained mechanics only old aged mechanics know
how to repair it
Poor brake no modern gadgets
No sound and heat proofing for cabin
POOR SUSPENSION. Modify rear suspension to one with coil springs
and shocks
POOR ANTI RUST COATING
The weight of car was same as other sedan cars but the weight was not
evenly distributed this made drivers difficult to contour the turns.
If Other companies rolled out 10 cars in given time, Hindustan motor
rolled out 3 ambassadors in that amount of time making wait period of 12
months.
COMPETITORS
Honda City launched in in India in 1998:
launch with slogan "Smart for the new generation" in 1.3-liter version
launch,
1.5-liter version are launch with "Top-in-class smart" slogan .
The side mirror is electronically foldable.
15-inch alloy wheels as standard equipment.
Include an armrest for the driver and additional map lights.
Gearbox simulates a 7-Speed automatic transmission
Basically was known as a luxury car
High speed car compared to ambassador
Maruti 800 in competition since 1983 with ambassador:
it was always the best-selling car in india till 2004. Hence the sales of
maruti 800 was way higher than ambassador.
manual 4-speed gearbox in ambassador wheras 5-speed gearbox in maruti
800
it captured the whole market and people usually preferred buying maruti
800 because of the low price
along with this various other varieties of models were in competition with
ambassador like maruti zen, maruti omni hence maruti was the biggest
competitor of ambassador.
Fiat padmini:
launched in 1974 padmini car of fiat was the competitor of ambassador.
The looks, specs and features of the padmini was same as that of
ambassador hence they had a shoulder to shoulder comoetition. But still
ambassador managed to be the preference of the consumers.
