Why the death of the Ambassador car and the licence raj is good news


It looks like the end of the road for the Ambassador, Hindustan Motors’ flagship product as production comes to a halt at their Uttarpara plant.

In a way, the death of the Ambassador (it’s not officially dead, but it seems imminent) underlines the distance that India has travelled in the past three decades –and the vice-like grip that the beneficiaries of the infamous licence raj and crony capitalism once had on Indian consumers.

Ambassador cards manufactured by Hindustan Motors. Reuters

Ambassador cars manufactured by Hindustan Motors. Reuters

The Ambassador was one of two truly terrible cars that ruled India, alongside the Premier Padmini. Terrible, did we say? In a nation where you were privileged (and powerful) if you owned a car, we fell over each other in a false sense of national pride to find extraordinary positives in these vehicles.

For example, look at how roomy the Ambassador is. It can seat the entire family, including the in-laws, we said. Look at the Premier Padmini – it can actually go up the ghats without the radiator heating to a level that the engine seized. Marvellous. We spoke with pride about how any roadside mechanic could repair these two cars, not for a moment thinking about why cars should break down so often.

We had a car, an Ambassador, and that was enough. We had, for decades, no power steering, no side mirrors, no power brakes, no stick shift gears, no seat belts. The seating resembled two sofas placed one in front of the other, except that these sofas smelled of low quality rexine, unlike the high-quality rexine sofas at home.

Yet these cars sold at a premium, and the manufacturers got as rich as they wanted, controlling the supply side to ensure that a black market premium thrived.


It was all down to the largesse of successive Congress governments, ensuring that no one other than these two (and a third, Standard from Chennai) were allowed to manufacture cars in India.

Then came the end of the licence raj, and the supply side grew exponentially – as did the quality of the new cars. Suddenly, it was real virtues and real features that mattered, not the imagined and manufactured ones. And consumers walked with their wallets to those brands which offered them more. And slowly, the Premier Padmini and the Ambassador lost all relevance and marketshare. Good riddance to these cars – and to the license raj


Published Date: May 25, 2014 01:39 pm | Updated Date: May 25, 2014 04:18 pm


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