Is it the end of the road for Kolkata’s Ambassador cabs?

Kolkata: The Ambassador car’s near monopoly as metered taxis on the streets of Kolkata may come to an end with the West Bengal government deciding late last month that it will allow other passenger cars that can seat up to five people to ply as cabs.

add_main_imageThe state government has decided to open the market to “more technologically advanced” vehicles, said Sabyasachi Bagchi, vice-chairman of the Regional Transport Authority (RTA).

The state will extend the cash incentive of ₹ 25,000 to buyers of new taxis to promote self-employment. The incentive was thus far confined largely to the Ambassador, made by Hindustan Motors Ltd (HM).NextMAds

It’s not as if the Ambassador hasn’t had competition. Two other vehicles—MarutiSuzuki India Ltd’s Wagon R and Tata Motors Ltd’s Indigo—have previously been allowed to be registered as metered taxis in West Bengal, but neither could break the Ambassador’s stranglehold on the market. Now all cars with engine capacity of 1,050-1,150 cc can seek registration as taxis in the state.

The Kolkata move comes as Mumbai phases out close to 4,500 Premier Padmini taxis in line with a Maharashtra government order that bans cabs that are more than 20 years old from plying in the city from 1 August.

Unlike the Ambassador, which is still being built, Premier Automobiles Ltd, now called Premier Ltd, stopped manufacturing the Padmini in 2000.

The Ambassador, which has been in production for more than 50 years, has a body that’s largely unchanged from its Morris Oxford origins. The all-yellow taxis, which move at a speed that can be best described as stately, have formed an integral part of Kolkata’s landscape for long.

Ambassador cabs, in black and yellow, are still common on the streets of Delhi, where many government departments also seem to have a strong preference for the vehicle.

But now the Ambassador, manufactured by Kolkata-headquartered HM in the suburbs of the city, is up against serious competition on its home turf. How it copes could well determine the future of some 3,000 workers who make the vehicle at Uttarpara, 10km from Kolkata.sixthMAds

“We have faced competition before, but rivals haven’t had much success (in Kolkata),” said Uttam Bose, HM’s managing director. “But competition is healthy.”

Bose himself had admitted in a 1 July Mint report that the car’s days may be numbered. “How many Ambassadors do you see on the road these days?” he asked.

For years, the Ambassador has enjoyed concessions from the West Bengal government because of its roots in the state.

HM was allowed to sell Bharat Stage III (BS III) taxis in Kolkata until now whereas in other metros, manufacturers have had to comply with the more stringent BS IV emission norms.

Earlier this year, HM upgraded the Ambassador to comply with BS IV norms and the new variant of the car is ready to hit the market. Taxi owners invited by HM to test drive the BS IV compliant Ambassador said they expected it to be priced at around ₹ 5.5 lakh.

“It’s great that we have more options now,” said Bimal Kumar Guha, general secretary of Bengal Taxi Association, a lobby group for cab owners.

The opening of a new market amid difficult times for the automotive industry has got manufacturers scurrying to seize it.

Local representatives of companies such as Maruti and Tata Motors have already initiated talks with lobby groups and offered discounts for bulk purchases.

Some 2,000 new taxi permits are to be issued immediately, which means that many new vehicles are to be bought, according to RTA’s Bagchi. Apart from that, at least as many more old taxis are decommissioned every year and replaced by new ones, he said.

“We see this as an opportunity… and plan to excite this segment with our dynamic product range,” Tata Motors said in an emailed statement.

“We have come to know about the decision,” said Maruti’s spokesperson, “and we will assess our opportunities… when we get an official communication.”

Of the new permits to be issued by the transport authority, at least half are to be for air-conditioned taxis.

Maruti’s DZire has already started getting attention from some potential AC cab owners, according to Guha. “For AC taxis, the DZire appears to be a good vehicle for its technology and resale value,” he said.

But cab owners are driving a hard bargain, and manufacturers will have to offer a substantial discount for old taxis headed for the scrapheap.

“We will settle for whoever gives us the best deal,” said Taraknath Bari, secretary of Calcutta Taxi Association, another lobby group. He refused to indicate any preference immediately.

HM typically offered ₹ 40,000 for junking old Ambassador taxis, apart from other cash incentives linked to excise duty.

But Guha said that amount isn’t “competitive” anymore because scrap dealers are willing to offer more for the clunky car famed for its tough exteriors.