Last time Peugeot sold a car in India, the result was nothing short of a disaster. The French company tied up with Premier Automobiles Limited (PAL)to sell the 309, which was no longer in production elsewhere. Since then Peugeot has been trying to get into the Indian market again and this time things are shaping up with Hindustan Motors, from whom they’ve just bought the Ambassador brand. On first thought, it seems odd since the company had earlier tried selling a car that was no longer in production and now it has bought a brand that is no longer in production. However, this time Peugeot has something it missed in its first innings in India – reasoning.
When Peugeot and PAL started selling the 309 in India, they were actually dumping cars onto a handful of dealers. The French company didn’t show any inclination towards establishing the brand or servicing the customers. Naturally, Indian buyers soon realised that they were being used for making a quickbuck and eventually Peugeot pulled out of the Indian market.
As the Indian market grew and Peugeot’s competitors from Europe and other parts of the world started setting up shop in India, the French brand started making attempts for its second innings in India. However, things moved slowly and eventually the brand succeeded in striking a deal with Hindustan Motors (HM). Through multiple deals, both companies agreed to use HM’s Chennai plant to assemble Peugeot vehicles. A deal with HM’s component arm Avtec has been signed for manufacturing of powertrains for Peugeot.
The most interesting part of the deal, however, is the purchase of the Ambassador brand for Rs 80 crore. Since this deal involves only the brand and it s variants and not the assembly line or related tooling, it’s safe to say that Peugeot will use the established Ambassador brand to make a big entry into the Indian market. For a change, this decision from Peugeot for the Indian market makes sense since Peugeot itself doesn’t enjoy a great brand perception and building it would cost a bomb considering the cut-throat competition.
Ambassador on the other hand has an emotional connect with almost all generations in the country capable of buying a car today. Peugeot presently has multiple small cars and it wouldn’t be too hard for the company to design a retro-looking modern car, based on one of its platforms. The company could look at pricing this car around the Rs 6 lakh mark, wherein it’ll fit in the premium hatchback or compact sedan segment. With such a car, Peugeot won’t have to struggle telling people what the brand is and where it comes from. If they get the design right, people might buy it good numbers too, thereby giving the French company a firm foothold.
Imagine if Peugeot had to establish itself In India using big ticket advertising, the cost would be much more than Rs 80 crore. With the Ambassador deal then, Peugeot finally seems to have put some reasoning in its Indian plans after years. It’ll be interesting to see how this partnership and the new Ambassador turns out.
All said and done though, it won’t be an easy task for Peugeot with just the Ambassador brand. The Indian market has already made multiple plans from global automakers fall flat on their face. Peugeot is entering the party late with little first-hand account of the market. Many people in India who know the brand already, know it for all the wrong reasons. Taking an iconic brand and bringing it up to speed with modern technology without compromising the original essence is a tough task. BMW has done it successfully with the Mini, at least in terms of sales so there’s some hope for Peugeot.
