Why did Hindustan Motors fail?

On 25th May 2014 Hindustan Motors announced that they will be suspending the production of Ambassador cars in India.

Hindustan Motors Ambassador

image-source:/wallpaperaccess

Early signs they ignored :

From 1958, they started their production in India to the early 1980s when Maruti entered with an 800cc model. The increasing popularity of the Maruti 800 was a warning about the impending future. And soon after the 1990s, when liberalisation took over the country new foreign market players came in with better technology hence attracted customers towards them.

They tried to sell Isuzu trucks but failed due to higher prices and poor service facilities.

In 1998 Hindustan Motors had a joint venture with Mitsubishi and offered lancer which initially sold well in the mid-size luxury car segment but eventually, in mid-2000 their sales dropped drastically.

What went wrong with Hindustan Motors :

When everybody in the market was looking for innovation and new technology, Hindustan Motors made no significant changes in its models and was not either in a mood to go for innovation.

Placement of products :

As more cars came to the Indian market, Hindustan motors struggled to fit their products in different segments. For example- Their famous flagship model Ambassador can only be seen in government officials garage or with a red light on top or at a taxi stands. The image started converting into a taxi more than a family car.

Famous Hindustan Motors products :

• Contessa

• Ambassador

• Landmaster

• Baby Hindustan

• Hindustan 10

• Hindustan Trekker

• Hindustan Veer

• Hindustan14

Here are some reasons why Hindustan Motors failed :

• Hindustan Motors did not bother to put more emphasis on product development and innovation.

• They did not adapt to the changing market needs, trends, and globalisation.

• They remained rigid with their products.

• They failed to place their products in the market.