Hindustan Motors halts Ambassador production

India's oldest automaker, Hindustan Motors has suspended work at its plant at Uttarpara, West Bengal. This could mean the end of the road for the Ambassador car, which has been in production at the facility since 1957. The suspension of operations at the plant will affect the lives of 2,500 workers who will be rendered jobless.

The move comes after the company cited worsening conditions at the plant including very low productivity, growing indiscipline, critical shortage of funds, lack of demand for the Ambassador and large accumulation of liabilities. The company's net worth had been completely wiped out and it had declared itself a sick unit to the Board for Industrial and Financial Reconstruction (BIFR).

The Ambassador, which was based on the British Morris Oxford, was having its work cut out keeping up with more modern products in the Indian auto market. As a result, the sales of the car were dropping year after year. In the recent past, the biggest buyers of the car were the Government and taxi operators. But with Government officials opting for more modern machinery, and taxi operators in most cities also moving away, the Ambassador's days were numbered. Hindustan Motors managed to sell just over 2,200 units of the car in 2013-14, far cry from the 24,000 units it sold annually in the 1980s.