France's Peugeot buys India's historic Ambassador car

France's Peugeot carmaker has bought the right to produce India's Ambassador car from Hindustan Motors for 800 million rupees (11 million euros).

An Ambassador in Delhi RFI/Tony Cross

Hindustan Motors owner the CK Birla group confirmed the sale of India's most famous motor vehicle on Sunday.

The company, India's oldest car manufacturer, stopped production of the Ambassador in 2014, citing debt and lack of demand.

The Ambassador, whose design was based on the British Morris Oxford which has not rolled off the assembly lines since 1971, used to be the vehicle of choice of Indian government officials and politicians but has been squeezed out by SUVs and other modern modes of transport.

Last month the Birla group and Peugeot owners PSA signed a separate agreement for two joint ventures with an estimated production capacity of 100,000 vehicles by 2020.

PSA was among the first foreign manufacturers to invest in India when it was opened up to investment in the 1990s but withdrew in 1997 after falling out with its local partners.