Calcutta, Feb. 10: French automobile major PSA Group, makers of the Peugeot, Citroën and DS, is acquiring the Ambassador brand from the ailing Hindustan Motors.

In a statement issued to Indian stock exchanges, the C.K. Birla-owned HM said it had executed an agreement to sell the brand, trademarks and certain associated rights for Rs 80 crore.

Peugeot is making its second attempt to enter the growing Indian automobile market.

In 1994, the French automaker had teamed up with Premier Automobiles, makers of the Padmini Fiat, to produce and market its Peugeot 309. But a labour unrest at the Kalyan plant and mounting losses forced Peugeot to exit from the joint venture in 1997.

It wasn't clear what Peugeot intended to do with the Ambassador brand. HM had stopped producing cars under this brand at least three years ago.

For diehard motor aficionados, it raises the prospect that the Amby will make a comeback in a new avatar. But the realist will probably dismiss this as a pipedream.

The Ambassador brand was born in 1957 as a Morris Oxford derivative in the newly independent and protectionist India and it was being manufactured at Uttarpara in Bengal.

After ruling the roads of pre-liberalised India, the car began to lose its pre-eminent position once Japanese automaker Suzuki entered the country with its Maruti brand in 1984.

A made-in-India car, the Ambassador remained in production till 2014 when HM declared suspension of work at the Uttarpara plant, citing lack of demand and the company's poor financial condition. Till that point, the Ambassador had largely been used as a taxi in Calcutta.

Today's agreement follows a partnership deal that Peugeot signed with the CK Birla group to invest 100 million euros (around Rs 700 crore) in a vehicle assembly plant and powertrain manufacturing unit in Tamil Nadu. Powertrain is the mechanism that transmits the drive from the engine of a vehicle to its axle.

The partnership covers two joint venture agreements. As part of the first agreement, PSA group will hold a majority stake in a joint venture company proposed to be set up with Hindustan Motors Finance Corporation Ltd (HMFCL). The company will assemble and distribute PSA passenger cars in India. The manufacturing capacity has been set at 100,000 vehicles per year.

HMFCL already has a manufacturing plant at Tiruvallur in Tamil Nadu where Mitsubishi vehicles are assembled under a contract manufacturing arrangement. The car plant was divested from Hindustan Motors, which is a sick company.

Under the second pact, a 50:50 joint venture is being set up between PSA group and Avtec, another C.K. Birla group company, to manufacture and supply powertrains.