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The political influence of the Birla family helped ensure that the Ambassador was one of the few cars that were in production following the 1954 government policy of promoting indigenous Automobile industry. It dominated the market for several decades, mostly due to its spacious size and ruggedness compared to its rivals like the Premier Padmini and Standard 10.[4] By the early 1980s, the comparatively expensive Ambassador's low fuel economy and poor quality began to hinder sales. It still represented more than two thirds of Indian car production, but wait lists were down to 12 months while the Premier Padmini had a wait list nearly five years long.[5] The Ambassador remained dominant in the official and company sectors, while also popular as a taxi, but private motorists gradually abandoned the "Amby" in the 1980s and 1990s.

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The car was briefly imported to the United Kingdom in 1992 (as the Fullbore Mark 10).[9] The cars were retrofitted with a heater and seat belts in order to comply with European safety legislation, but only a tiny number were ever sold and the importer went into liquidation.[10]

In later years, Hindustan Motors fitted the cars with a cleaner diesel engine in order to comply with new emission rules, allowing it to resume taxi service in Kolkata, one of the cities in which the vehicle had been banned.

In 1975, the Mark 3 version was launched with another frontal facelift. The front grille had horizontal louvres giving it a modern feel and a round profile indicator lamp now isolated from the grille. At the rear a more modern looking number plate bezel replaced the early design which was commonly used by many other British cars as well. The interior now had a new dashboard with 3 standard instruments mounted on a black recessed mesh again moving away from the early coated wooden base with aluminium strip design. By 1978, the Mark 3 was available in its Standard and Deluxe versions. The Deluxe version had a newer dashboard with four meters plus the speedometer. Just before the launch of the Mark 4, the Mark 3s had their front windscreen wiper configuration changed, with a common direction sweep for both wipers. This configuration was prevalent in the new Ambassadors till the end. This has a short span of less than 3 years in production before being replaced with a Mark - IV model in 1977.

The Mark IV was the last of the Mark cars. For a short period the cars were available as Deluxe and later it was renamed Ambassador Nova. The Ambassador of 1990 (except for the front cowl area) was virtually identical to the 1956 original, with most changes being light and cosmetic. The changes were mainly the front styling and minor changes to the dashboard. This technological stagnation was mainly because of the protectionist policies being pursued by the Indian government at the time, and there was little incentive on the part of Indian companies to innovate. During that time, the newly Hindustan Contessa started getting produced, intended to replace the Ambassador, however, the Ambassador proved to be more popular, and so surpassed the Contessa in production.

It was during the Mark IV's model run that India launched a controlled economic liberalisation in the mid-1980s which allowed many Japanese companies to establish joint ventures in India. Maruti Suzuki launched its Maruti 800 in the then non-existing small car category. The then existing manufacturers Standard Motors, Premier Automobiles and Hindustan Motors were licensed for larger category cars. The Ambassador still remained the principal family car of choice in the middle segment in spite being a pre-modern design with dated styling. The company also earmarked for a major upgrade for its mechanical and power plant systems, creating a model later launched as Nova.

In the early 1990s, the old Austin-designed B-Series OHV straight-4 BMC 1.5L petrol engine was replaced in favour of an Isuzu 1.8 litre engine and became the fastest production car in India, beating Fiats, and the Maruti Suzuki cars at that time. The engines currently available are the 1500 DSL (1.5L 37 bhp diesel engine), 1800 ISZ (1.8 L 75 bhp MPFI petrol engine), 2000 DSZ (2.0 L 50 bhp Isuzu diesel engine) and 2000 DSZ Turbo (2.0 L 75 bhp turbocharged intercooled Isuzu diesel engine.

In the late 1970s a limited batch of Mark III Ambassadors were produced with 1,760 cc engines. They were fitted with Constant Velocity SU side-draft carburettors of an earlier era instead of the more common indigenous variable velocity Solex down-draft units. The engine blocks of these cars had "1760" etched on them instead of the usual "1500". These were probably produced to handle the extra load of the piston-driven air conditioner compressors available in those days. The trim (metal beading) of these cars were a throwback to the sixties because they were chrome plated instead of aluminium.

An embryonic automotive industry emerged in India in the 1940s. Hindustan Motors was launched in 1942 building Morris products, long-time competitor Premier in 1944, building Chrysler Corporation products such as Dodge and Plymouth, and beginning in the 1960s, Fiat products.[10] Mahindra & Mahindra was established by two brothers in 1945 and began assembly of Jeep CJ-3A utility vehicles. In the same years, J. R. D. Tata, the chairman of Tata Group founded TATA Engineering and Locomotive Company (now Tata Motors) in Jamshedpur. Following independence in 1947, the Government of India and the private sector launched efforts to create an automotive-component manufacturing industry to supply to the automobile industry. In 1953, an import substitution programme was launched, and the import of fully built-up cars began to be restricted.[10]

The Tariff commission policies, including similar restrictions that applied to other industries, came to be known as the Licence Raj, which proved to be the greatest undoing of the Indian automotive industry, where bureaucratic red tape ended up causing demand to outstrip supply, with month-long waiting periods for cars, scooters, and motorcycles.

During the eighties, a few competitors began to arrive on the scene. Of the 30,487 cars built in India in 1980, all but six came from the two main players Hindustan and Premier: Standard had led a shadow existence in the latter half of the 1970s, producing only a handful of cars to keep their license active.[15] A new contender was tiny Sipani, which had tried building locally developed three-wheeled vehicles since 1975 but introduced the Reliant Kitten-based Dolphin in 1982. Nonetheless, all eyes were on Maruti, which caused a major upheaval to the Indian automobile industry.[15]

Exports were slow to grow. Sales of small numbers of vehicles to tertiary markets and neighbouring countries began early, and in 1987 Maruti Suzuki shipped 480 cars to Europe (Hungary). After some growth in the mid-nineties, exports once again began to drop as the outmoded platforms provided to Indian manufacturers by multinationals were not competitive.[17] This was not to last, and today India manufactures low-priced cars for markets across the globe. As of 18 March 2013, global brands such as Proton Holdings, PSA Group, Kia, Mazda, Chrysler, Dodge and Geely Holding Group were shelving plans for India due to the competitiveness of the market, as well as the global economic crisis.[18]

India levies an import tax of 125% on foreign imported cars, while the import tax on components such as gearboxes, airbags, drive axles is 10%. The taxes are intended to encourage cars to be assembled in India rather than be imported as completely built units.[20]

In 2006, the government of India imposed a new tax structure, which massively impacted the segment. It enables vehicles shorter than 4.0 metres (157.5 in) to qualify for a significantly lower excise duty, which is 8 percent as opposed to 20 percent for longer vehicles.[21] Tata Motors was the first to exploit the new tax structure, which redesigned the rear portion of the Indigo sedan, dropping its length to 3,988 mm (157.0 in) and renamed it as the Indigo CS.[22] The model became significantly cheaper, becoming one of the largest selling three-box cars in the country.[23] Other manufacturers quickly adapted, which led to the release of the shorter Suzuki Swift Dzire, the new Honda Brio Amaze, and others.[24]

According to The New York Times, India's strong engineering base and expertise in the manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai, Nissan, Toyota, Volkswagen, and Maruti Suzuki.[129]

In 2008, South Korean multinational Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors planned to export 250,000 vehicles manufactured in its India plant by 2011.[130] Similarly, US automobile company, General Motors had announced its plans to export about 50,000 cars manufactured in India by 2011.[131]

In September 2009, Ford Motors announced its plans to set up a plant in India with an annual capacity of 250,000 cars, for US$500 million. The cars were manufactured both for the Indian market and for export.[132] The company said that the plant was a part of its plan to make India the hub for its global production business.[133] Fiat Motors had announced that it would source more than US$1 billion worth auto components from India.[134]

In recent years, India has emerged as a leading center for the manufacture of small cars. Hyundai, the biggest exporter from the country, now ships more than 250,000 cars annually from India. Apart from Maruti Exports' shipments to Suzuki's other markets, Maruti Suzuki also manufactures small cars for Nissan, which sells them in Europe. Nissan will also export small cars from its new Indian assembly line. Tata Motors exports its passenger vehicles to Asian and African markets, and is preparing to sell electric cars in Europe in 2010. The firm is planning to sell an electric version of its affordable car the Tata Nano in Europe and in the U.S. In the 2000s, Mahindra & Mahindra prepared to introduce its pickup trucks and small SUV models in the U.S. market, but canceled its plans. As of 2019, it is assembling and selling an off-road vehicle (Mahindra Roxor; not certified for road use) in limited numbers in the U.S.[137] It is also sold in Canada. Bajaj Auto is designing a low-cost car for Renault Nissan Automotive India, which will market the product worldwide. Renault Nissan may also join domestic commercial vehicle manufacturer Ashok Leyland in another small car project.[138] While the possibilities for the Indian automobile industry are impressive, there are challenges that could thwart future growth. Since the demand for automobiles in recent years is directly linked to overall economic expansion and rising personal incomes, industry growth will slow if the economy weakens.[138] 2351a5e196