Ambassador’s new spark: will the electric version of the car work?

Hindustan Motor Financial Corp recently announced that it would be relaunching its iconic Ambassador car - but in a new electric avatar. According to Reuters, the new Ambassador will be manufactured at the Chennai facility and the new model will most probably launch by 2024.

In 2017, Hindustan Motors had sold the rights to Ambassador's brand to Peugot - a French automobile manufacturer. A few years earlier in 2014, the company had stopped production of the iconic automobiles. It was an iconic car because the Ambassador was the first car to be made in India. It served as a status symbol - one that represented wealth and power.

A NDTV report carried a statement from Hindustan Motors about why they stopped manufacturing the iconic vehicle. The company cited "worsening conditions at its Uttarpara plant which include very low productivity, growing indiscipline, critical shortage of funds, lack of demand for its core product the Ambassador and large accumulation of liabilities."

To understand if the new avatar of the car would work in the Indian market - we reached out to Avik Chattopadhyay, founder, Expereal, a brand consultancy firm and he mentioned that there are 2 parts to the announcement of the Ambassador being relaunched.

[1] Ambassador to be reborn as an EV and

[2] HM to revive with an EV.

“Stellantis owns the Ambassador brand [as PSA bought it from HM in 2018] so if #1 is to be true then Stellantis has decided to introduce a 'budget' electric car in India, quite a deviation from its global strategy. If #2 is true, then HM may launch an EV but cannot call it Ambassador as Stellantis owns the brand name!” he says.

Chattopadhyay says that he does not see the Ambassador being reintroduced as an electric car at all in India. “It does not make any strategic sense for Stellantis to do so as the costs will not be covered in any way. The Jeep and Citroen brands do not have any EV offering in India right now, so reviving Ambassador as an EV brand does not make any sense whatsoever,” he writes.

He adds that if HM does introduce an EV without the Ambassador badge, there is no question of any "effect" at all. The Ambassador car does come with its fair share of nostalgia value - Chattopadhyay mentions that if Stellantis does make the strategic blunder, the legacy and nostalgia will not help as Ambassador did not leave us in 2014 on a high note.

“To the younger generation the name Ambassador rings as much a bell as Premier or Standard...brands of the previous generations that failed to survive,” says Chattopadhyay.

Rohit Raj, VP Strategy and Consulting, Dentsu Impact mentions that the Ambassador being re-introduced as an EV, will definitely drive a lot of buzz for the EV segment. However the teething issues facing the EV industry have a lot more to do with bigger issues like low density of infrastructure, pricing and mindset issues like range anxiety etc. “In this context, the relaunched Ambassador will also be burdened with these issues regardless of it’s iconic status.”

Could nostalgia work in favour of the car when it is relaunched in a market where the consumers have possibly not experienced the iconic vehicle? “The nostalgia aspect can certainly put the brand in the mind space of consumers, it can be a double edged sword. While nostalgia is a powerful tool, it also has associations with the not so good things as well, which could backfire especially for a segment which is driven by very strong technology associations. The tightrope walk for the brand would be to retain the strong positive emotional aspects of the brand, while building cutting edge, new age technology codes,” says Raj

According to Raj, the aspect of nostalgia works beautifully in impulse categories, but when it comes to automobiles, the balance between rational and emotional drivers starts skewing a lot more towards rationality. “So unless the product is top notch, the nostalgia will not really do much beyond a point,” he opines.