Woes at Hindustan Motors
Way back in 1998 Mitsubishi Lancer was the epitome of Luxury in Indian cars. Nice engine, superb build quality and those killer looks sold cars off the showroom floors without hassle. HM was happy, so happy they decided to go to sleep. Come 2010, Honda City, Mitsubishi's closest competitor is selling close to 3000 cars a month while HM managed Lancer and Lancer Cedia together hardly make 1% of that number. There were a lot of reasons HM has failed since the advent of Maruti in the 80's. But this post is not about the woes HM is facing. The media I am sure will kill a dying company much before its time by doing that. It is about what HM should do since Ravi Santhanam is not at the helm anymore.
Assets
HM has three major assets. A Brand name that has strong sentimental patriotic values by meaning and by its car making history. Secondly they have two car platforms at hand which are cheap to build and can be repaired just about anywhere with easy availability of Spares (A major reason why most people buy Maruti's today). Thirdly HM has the technical know how from making HM's own branded cars, Mitsubishi cars and outsourcing services for some major companies. Additionally, The Company also has sentimental values thanks to the Hindustan Ambassador's long lasting roots.
What I would do
1. Bring back the HM Contessa refresh model: I don’t know how many Indians are aware that the quickest car in the world is based on a Contessa. :D Even if the world knows, I am sure HM doesn't. Muscle cars are what brought Ford GM and Chrysler back from the dead. It was the Mustang, Camaro and Challenger that gave these American companies a new face. The Contessa reeks of American Muscle cars and that is not a bad thing. Many a discussion groups have tons of people filling hundreds of pages with dreams of converting a Contessa into a muscle car. Hindustan Contessa was a luxury segment car for HM. A segment in which you get the Civic, Cruze, Corolla, Octavia and similar cars today. The last batch of Contessa cars were sold at around 5 lacs. HM has the plant idle and the dye and machinery at Hand. A refreshed Interior designing might costs a bomb but what would giving at a retro look with good quality parts cost? The initial batch will only be a branding exercise to bring attention back to the oldest car maker (which again is an asset from HM).
The list of upgrades needed (assuming they sell a modest 3000 cars in a year)
1. A climate control unit. Most Contessa and Ambassadors have had after market units attached to the dash. A neat job for the same with a climate control unit will be affordable as well as a boon.
2. 16 inch alloys. Some work might be needed with the chassis and suspension as weak suspension has often been cited as the drawback.
3. Redesigned Headlamps. Mr. Manvendra, who worked for Ambassador Avigo can provide a similar update for the Contessa.
4. The same Isuzu petrol unit tuned to give good fuel efficiency will work along with a diesel engine sourced from Ford or Renault. (Both have a 1.4 diesel in their cars in India which best known for their fuel efficiency). HM also has a good tie with Ford. Do the math. Additionally while the engine are not as powerful as the rest of the segment. Look at what Fiat has done with the Linea.
5. A premium audio system with Bluetooth, USB and other knick knacks.
6. Lift the Outside rear view mirrors from the lancer 1.5 parts bin and utilize it on the Contessa.
7. Add ABS with EBD and 2 airbags which are par a segment standard.
8. Provide the car with an add-on RPM meter as the dash doesn’t have one. Ritz and A-star have such tachometers and it looks cool.
9. Since it is a big car, work on the gear ratios to make it more drivable in the city while giving better fuel efficiency.
10. Add stereo controls on the steering wheel to make up for the lack of old interiors.
11. Add fog lamps and rear stop light. Also add a shaker to the hood.
12. Advertise
13. Advertise
14. Advertise.
For a car that was being sold for about 5 lacs. A price tag of 10 lacs is easily justifiable with the upgrades mentioned above along with other minor upgrades still leaving the company with enough room for a fat margin.
2. Introduce an Ambassador hatch: The Beetle has an age old design; the Mini Cooper has been selling for decades. I am sure a properly redesigned small car based on Ambassador will also bring in sales for HM. A length below 4 meters mark along with 1.2 petrol and 1.4 diesel engines and CNG LPG options (all except the petrol engine already available) will make the car even cheaper to sell against the competition. Since the spares are already available for the Ambassador and since it can be repaired anywhere while giving good FE at the same time, there is no reason why a well built Amby hatch won’t sell. The car is also known for robustness and comfort. A rough calculation puts a monthly sale figure at 1000 units if sold at 5-6 lacs.
3. Redesign the Ambassador: The Above two steps should bring in enough finances and a stronger dealer network to redesign the Ambassador grounds up making it equally competitive with the likes of Indigo Manza and Swift Dzire. Using the same engines on all the three cars will further help bring costs down and increase margins while making spares availability easy.
4. Improve the quality to meed European standards and begin exporting cars.
Looking at how shrewd and intelligent the Birlas are, the current state of affairs at HM is a plain shame. The nameplate bears the name of the country and the condition reminds us of the baburaj of Bengal in the 60's and 70's. If GM can rise from Bankruptcy, I am sure HM can do the same too.
Singing off with some nice concept cars based on Ambassador cars with similar history and looks.
Hindustan Motors (HM) Ambierod designed by Dilip Chabbaria (DC Designs)
HM Ambassador Avigo
BMW owned MINI Cooper. Look at the resemblance
Another iconic European car (the beetle). Ambassador is also a European car by roots.
Assets
HM has three major assets. A Brand name that has strong sentimental patriotic values by meaning and by its car making history. Secondly they have two car platforms at hand which are cheap to build and can be repaired just about anywhere with easy availability of Spares (A major reason why most people buy Maruti's today). Thirdly HM has the technical know how from making HM's own branded cars, Mitsubishi cars and outsourcing services for some major companies. Additionally, The Company also has sentimental values thanks to the Hindustan Ambassador's long lasting roots.
What I would do
1. Bring back the HM Contessa refresh model: I don’t know how many Indians are aware that the quickest car in the world is based on a Contessa. :D Even if the world knows, I am sure HM doesn't. Muscle cars are what brought Ford GM and Chrysler back from the dead. It was the Mustang, Camaro and Challenger that gave these American companies a new face. The Contessa reeks of American Muscle cars and that is not a bad thing. Many a discussion groups have tons of people filling hundreds of pages with dreams of converting a Contessa into a muscle car. Hindustan Contessa was a luxury segment car for HM. A segment in which you get the Civic, Cruze, Corolla, Octavia and similar cars today. The last batch of Contessa cars were sold at around 5 lacs. HM has the plant idle and the dye and machinery at Hand. A refreshed Interior designing might costs a bomb but what would giving at a retro look with good quality parts cost? The initial batch will only be a branding exercise to bring attention back to the oldest car maker (which again is an asset from HM).
The list of upgrades needed (assuming they sell a modest 3000 cars in a year)
1. A climate control unit. Most Contessa and Ambassadors have had after market units attached to the dash. A neat job for the same with a climate control unit will be affordable as well as a boon.
2. 16 inch alloys. Some work might be needed with the chassis and suspension as weak suspension has often been cited as the drawback.
3. Redesigned Headlamps. Mr. Manvendra, who worked for Ambassador Avigo can provide a similar update for the Contessa.
4. The same Isuzu petrol unit tuned to give good fuel efficiency will work along with a diesel engine sourced from Ford or Renault. (Both have a 1.4 diesel in their cars in India which best known for their fuel efficiency). HM also has a good tie with Ford. Do the math. Additionally while the engine are not as powerful as the rest of the segment. Look at what Fiat has done with the Linea.
5. A premium audio system with Bluetooth, USB and other knick knacks.
6. Lift the Outside rear view mirrors from the lancer 1.5 parts bin and utilize it on the Contessa.
7. Add ABS with EBD and 2 airbags which are par a segment standard.
8. Provide the car with an add-on RPM meter as the dash doesn’t have one. Ritz and A-star have such tachometers and it looks cool.
9. Since it is a big car, work on the gear ratios to make it more drivable in the city while giving better fuel efficiency.
10. Add stereo controls on the steering wheel to make up for the lack of old interiors.
11. Add fog lamps and rear stop light. Also add a shaker to the hood.
12. Advertise
13. Advertise
14. Advertise.
For a car that was being sold for about 5 lacs. A price tag of 10 lacs is easily justifiable with the upgrades mentioned above along with other minor upgrades still leaving the company with enough room for a fat margin.
2. Introduce an Ambassador hatch: The Beetle has an age old design; the Mini Cooper has been selling for decades. I am sure a properly redesigned small car based on Ambassador will also bring in sales for HM. A length below 4 meters mark along with 1.2 petrol and 1.4 diesel engines and CNG LPG options (all except the petrol engine already available) will make the car even cheaper to sell against the competition. Since the spares are already available for the Ambassador and since it can be repaired anywhere while giving good FE at the same time, there is no reason why a well built Amby hatch won’t sell. The car is also known for robustness and comfort. A rough calculation puts a monthly sale figure at 1000 units if sold at 5-6 lacs.
3. Redesign the Ambassador: The Above two steps should bring in enough finances and a stronger dealer network to redesign the Ambassador grounds up making it equally competitive with the likes of Indigo Manza and Swift Dzire. Using the same engines on all the three cars will further help bring costs down and increase margins while making spares availability easy.
4. Improve the quality to meed European standards and begin exporting cars.
Looking at how shrewd and intelligent the Birlas are, the current state of affairs at HM is a plain shame. The nameplate bears the name of the country and the condition reminds us of the baburaj of Bengal in the 60's and 70's. If GM can rise from Bankruptcy, I am sure HM can do the same too.
Singing off with some nice concept cars based on Ambassador cars with similar history and looks.
Hindustan Motors (HM) Ambierod designed by Dilip Chabbaria (DC Designs)
HM Ambassador Avigo
BMW owned MINI Cooper. Look at the resemblance
Another iconic European car (the beetle). Ambassador is also a European car by roots.
PS: HM has finally decided to do up the Amby with the help of European Design studio. Looks like someone's been reading my blog. :) Hope they implement the plan completely and do a Royal Enfield kind of turnaround which is not selling like hot cakes thanks to Siddharth Lal. And maybe peugeot can help them as well with R&D and engines.
http://www.facebook.com/photo.php?pid=7823845&l=87a5dd3921&id=548209851
ReplyDeleteNice link Thomas. Thank you. :)
ReplyDeletegreat post bro!
ReplyDeleteHM executives should read this :p
Rightly said Abhay.. In fact implanning to buy a contessa N try to give it a new look instead of restoring.. Im sure there are many other HM fans waiting to hear some good news from them :)
ReplyDeleteawesome post boyracer..
ReplyDeleteThanks Abhay.
ReplyDeleteThanks Shiron. Hope the company gets some bright managers who can restore the legacy.