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Old 4th May 2010, 10:37   #1
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Default Hindustan Motors sinking? To report to the BIFR

The company's networth is Rs. 164 crores, but is sitting on accumulated losses of Rs. 132 crores. Also, HM has lost 50% of its net worth in the last 4 years.

A classic example of failure : The HM Ambassador once ruled the (protected) Indian car market, alongwith the Premier Padmini (and a couple of Jeeps). Enter Maruti in the 80's, then India opened up to global players in the 90's...still, HM continued to do business the ol' way. While newer players introduced cutting-edge cars, HM till date sells the WWII Ambassador, the 7th generation Lancer (a '1995 model) and the 8th gen as well (though a 9th gen has been introduced worldwide). You'll find another old lady in the 2nd generation SUV that made its world debut in 1992, yet somehow, HM manages to sell some at 20 lakhs 20 years down the line!

Come to think of it....showing up at the BIFR office (Link to BIFR) was inevitable! Premier, in the meanwhile, has launched some Chinese SUV-wannabe that's powered by a Peugeot diesel they had lying around in the dusty warehouse.

Conversely, consider the position of the other two homegrown players : Tata & Mahindra. Healthy, sitting on a pile of cash and continuously growing their marketshare. Another remarkable story is that of Bajaj Auto, and how they came out of the "Hamara Bajaj Scooter" mindset. The kind of stuff to be proud of.

News Source - The Economic Times

Related Threads:

History of HM

HM to exit car business

When will the new Lancer come to India?

Reviving the Ambassador

HM's new model

Last edited by GTO : 3rd November 2011 at 11:25.
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Old 4th May 2010, 10:40   #2
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If HM sinks... Well, I'm sad that it'll take Mitsu's Indian operations with it, but, good riddance. The Ambassador should've been put to rest a decade ago. Maybe two. Instead it continues to terrorize the Indian roads.
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Old 4th May 2010, 11:15   #3
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Default Lost opportunity

I feel that HM's fate was sealed long back, when in spite of numerous collaborations and a growing automobile market, the company couldn't manage to get a decent market share.
I would regard it as a case of lost opportunities due to mismanagement, or perhaps the Birla group was not serious about this business .The recent and one of the biggest lost opportunity , IMO, was the failure to launch the right products at the right prices and at the right time, from the Mitshubishi stable.
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Old 4th May 2010, 11:32   #4
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Good riddance! I hope Mitsu comes in as an individual player like some of the others, w/o JV and revives the brand. They have the quality, just need some support.
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Old 4th May 2010, 11:41   #5
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You know what surprises me the most. HM could not revive itself inspite of having a capable and world class partner like Mitsubishi with them.
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Old 4th May 2010, 11:46   #6
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Certainly beginning of the end for HM, again taking Indian buyers for granted. I know what HM might be thinking, Can we go back in time & sell those Ambys, certainly not possible as explained by Stephen Hawking.

Would Indian Govt. step in & revive HM?

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Old 4th May 2010, 11:49   #7
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A decade late! HM doesn't deserve a place in the 21st Century the way they were doing business.

Originally Posted by n.devdath View Post
You know what surprises me the most. HM could not revive itself inspite of having a capable and world class partner like Mitsubishi with them.
Mitsu is world class, has excellent and more importantly exciting products. BUT they are not in good shape. I don't think they have the money to invest in India and make it big. They shut down Ralliart recently.
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Old 4th May 2010, 11:55   #8
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If not for Ambassador being bought in bunches by Govt departments till late (still?) HM would have gone the Padmini way a long time back. Yes, Mitshubushi sales are there, but then without a proper service support and lack of latest models how long.
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Old 4th May 2010, 11:56   #9
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It is sad to see the down fall. The Amby was once the state car, a prestigious possession for many (my uncle owned a black Amby in the 70s-early 90s). HM should have taken some business exercises. Thus far HM kept it's head high to float but the sheer weight of losses is bringing it down. I fondly remember the numerous tours we had on 'The Taxi = Amby'. The Contessa was a classic. I am glad atleast TATA and Mahindra are in fore front competing with major global players.

The minimal design tweaks for the good-old Amby did not work.
Anyone, any thoughts on how they could have revived the Amby, retaining the image?

Thanks GTO for an informative thread.
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Old 4th May 2010, 12:28   #10
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Ambassador as a product lost all significance once the market was opened up. If the Birlas were blind to the market, then they adopted the crutch of a lame Mitsubishi to survive.
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Old 4th May 2010, 12:32   #11
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HM's demise will be good for Mitsu...

They will hopefully re emerge in the market alone, and launch new models.
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Old 4th May 2010, 12:35   #12
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Exactly what will be the fate of companies who dont listen to the customer.

Customer is ultimately the King !!

Hope that better sense prevails and they reshape their strategy & come out healthier :

- Do the volumes of the Amby justify the continuation of the line ?
How much longer can they continue to flog it ? I feel if they upgrade the Amby substantially, it can survive. Better engines & interiors, fit & finish, suspension upgrade & quality improvement should be enough to assure it a niche market.

- Let Mitsubishi take an active role in the management with a presence on the management team. Get the new Lancer on priority & beef up the rest of the range.
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Old 4th May 2010, 12:38   #13
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I may be the 1st pessimist in this thread, but none the less. What if some powerful govt lobby decides to place a HUGE order for say,some 500-1000 more ambys, just to increase the Birla group's company value - out of the sick' state?

After all, reporting to BIFR doesnt mean end of the road for the amby. It may turn any which way... lets see.

(PS - Want a vote on this thread to check how many want a closure/revival?)

From a company POV - I say dont close it, just kill the product and retain those jobs and intorduce more newer Mitu's - doesnt mitsu have a cute small car anywhere to sell in India?!!!

Last edited by svsantosh : 4th May 2010 at 12:40.
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Old 4th May 2010, 13:08   #14
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Along with the changing scenario in the automotive market, a major nail in the coffin of HM was their management itself which ran like a bureaucratic organization plagued with the whimses of trade union and rampant strikes in the factory. Under this scenario it was impossible for them to compete with the MULs,TATAs,Mahindra-s.
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Old 4th May 2010, 13:09   #15
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I'm the second pessimist! The Amby has so much retro appeal,and evokes memories of India's automotive past. Coupled with the 1.8 ISZ petrol,it can still give some hatches out there a run for its money in most departments except quality. And its always nice to have a retro car around,lending some charm & variety to the market!

Originally Posted by svsantosh View Post
From a company POV - I say dont close it, just kill the product and retain those jobs and intorduce more newer Mitu's - doesnt mitsu have a cute small car anywhere to sell in India?!!!
They have the Colt,but when Mitsu wakes up from its slumber and shuns their lethargic attitude towards the Indian market,it'll probably be too late then.
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