AMBASSADOR – The End of an Era

HINDUSTAN MOTORS

• First Indian automobile co. to start production in 1942

• Part of the Birla Group

• Market leader till 40 years after inception

• Ambassador- first ever car made in India.

Ambassador - Success Story

• Modelled after the British Morris Oxford series III• Suited for Indian roads and conditions• Until the 1980s the highest selling car in India• Almost every car sold was an Ambassador• Driven on the Indian roads for the longest period of time• Fondly called ‘The King Of Indian Roads’• Choice of bureaucrats and politicians

Ambassador - Decline

• Launch of Maruti 800 by Maruti Suzuki in 1983

• Significant cheaper price of Maruti 800- blow to Ambassador’s position

• Drop in market share from 75% to 20% from 1984 to 1991

• Indifferent to demand for modern technology and style

Ambassador

sStrength

• Large Distribution network

• Sturdy car• Spacious• Authentic Indian car• Recognized brand

wWeakness

• Low technological innovations

• High price• Slow decision

making process• Resistance to

change

oOpportunities

• Expand export base• Invest in

technological advancement

tThreats

• Increased competition

• Changing consumer demand

New entrants

• Entry of MUL with cheaper car and entry of foreign competitors after liberalization in 1991

Supplier

s

• Increased due to increase in other players in the market• MUL

Buyers

• As the number of options available to consumers had increased. They had cheaper and more advanced products available in the market

Substitutes

Competitors

• There were cheaper substitute available like two wheelers

• Increased sales of foreign competitors led to downfall of HML due to product differentiation and price leadership

Maruti 800

sStrength

• Aesthetic looks• Fuel efficient• Compact• Affordable• Latest

technology

wWeakness

• Inexperienced• No diesel

variant

oOpportunities

• Untapped hatchback market

• Price sensitive customers

• Growing middle class

tThreats

• HML launching a similar variant

Existing competition

Threat of new

entrants

Bargaining power of

buyers

Threat of substitutes

Bargaining power of suppliers

VRIO

Value

Rare

Inimitable

Organisation

What could they have done?

• Design- aerodynamic

• Market components

• Improve customer service

• Refurbish Ambassador

Amberoid - 2011

Top Gear hails Ambassador as the best taxi

Top Gear video