The Pioneer of Indian Automotive Industry: Premier Auto
Introduction
As you guys know today India’s automotive market is very modern. The road to get up-to this position was not easy. The pioneer of this road was Premier Automobile Limited. This company was established in 1944 but unfortunately this company no more operates as they filed bankruptcy in 2018. This company witnessed the growth of Indian Automotive industry from a protected landscape to global competitive arena.
Starting of Premier Automobile
Origin:
A visionary industrialist Sir Walchand Hirachand who is also known as ‘Father of Indian Transportation’ founded Premier Automobile on 27th June 1944. In this bold action he was not alone, one of India’s most respected engineers Sir M. Visvesvaraya. Both understood the market needs and industrial capabilities of India.
Vision:
Premier Automobile was a bold more by Sir Walchand Hirachand. This was not any random decision by any industrialist. Sir Walchand Hirachand took this decision to help independent India’s domestic automobile market flourish as well as reduce the automobile imports.
Rise of Premier Automobile
The journey of Premier Automobile started with a strategic partnership, which helped the company to grow at a rapid pace. From 1941(before establishing Premier Auto) negotiation was started with Chrysler Corporation for the licence to build Plymouth & Dodge cars. This partnership played a crucial role for establishing Premier’s technical & market presence.
The most memorable day for Indian Automobile industry took place on October, 1947. This month 1st Premier manufactured, made in India trucks & cars rolled out from the factory to the roads of independent India. For this, Premier was positioned as the pioneer in India’s automotive independence.
The Chrysler Era:
In initial days (around 1949) Premier used to manufacture cars under big names like Dodge, Plymouth, DeSoto & Fargo. The quality of Premier’s production was labelled ‘GOOD’ not only by the Indian Department of Defence but also by ‘Chrysler’ it-self. This labelling established Premier’s reputation for reliability. The partnership with Chrysler unfortunately ended around 1960s.
The Fiat Era:
After ending the partnership with Chrysler, Premier tied-up with Fiat. This partnership started the golden era of Premier. In 1964, Premier introduced ‘Fiat – 1100 Delight’ and this made Premier more famous because this car became the legendary Premier – Padmini (formally known as Premier – President). I have already made a detailed blog on Padmini click the image below to read that blog.
The Premier – Padmini achieved a huge success around 1970s and 80s. This car almost held 99% of market share at that time. There were many cars that made with the fiat but Padmini was the most famous one.
Commercial Vehicles:
Not only private vehicles Premier also manufactured a wide range of commercial vehicles for various transport. The commercial vehicle division used to manufacture trucks, buses and specialised vehicles to back the growing economy of independent India by helping in the transport industry.
The beginning of Decline
The main two reasons of starting the downfall was
i) The 1991- Economic liberalization:
After 1991 economic liberalization started, the downfall of Premier Automobile also started. Before the liberalization the market was restricted for the foreign car manufacturers but after the liberalization Indian market was opened for foreign car manufacturers like Honda, Hyundai, Ford etc. The foreign brought more fuel efficient, more powerful and more technologically advance cars at same price compare to Premier.
ii) Failure to modernise:
One of the reason for downfall of Premier was, failure to modernise according to time. For example, when competitors were using Fuel Injection system Premier was still stuck with the old carburetors. The design was largely unchanged from 1960s. The Padmini had a cultural significance but it was essentially 1957’s Fiat 1200 which was discontinued in Italy in 1960s. In 1990s Padmini’s design felt outdated in front of other cars.
Deliberate attempts to revive
i) The Peugeot Partnership:
To revive Premier Auto, they also entered a partnership with French car manufacturer Peugeot in 1995. Premier used to manufacture the Peugeot 309 passenger cars in India. This model was outdated as well as obsoleted in international market. But in India the initial demand was high but due to labour problem and poor service led to significant issues.
The important thing is that, Premier also continued the partnership with Fiat. They used to manufacture Fiat’s Uno and that created conflicts with Peugeot. These conflicts led to disagreements and the disagreements led to the exit of Peugeot from the joint venture around 2000.
ii) The Fiat – Uno venture:
Premier again partnered with Fiat and established PAL Auto, where Fiat held 51% stake. This joint venture was intended to manufacture Fiat – Uno as well as Premier’s other models like Padmini & 118 NE. The partnership failed in 2007 due to labour problem and service issues. Which damaged both companies’ reputation.
iii) The Premier Sigma Era:
On November 2004, Premier attempted to revive again with Tiwan’s China Motor’s small diesel-powered van. This van was based on 1980’s Mitsubishi – Varica design which China Motor had license. Initially Premier planned to fit Peugeot’s TUD-5 diesel engine but at the end they fitted Hindustan built 2L diesel engine, with 4 speed gearbox.
By 2009, Premier developed various types of Sigma – Van for different purposes like ambulance, cargo, school van, tourist van etc. This time Sigma had a 1.5L IDI diesel engine with optional turbo and CNG powered 1.8L 4PZB1 engine.
iv) The Premier – Rio:
With the help of China, Premier again tried to enter in passenger vehicle market with Premier – Rio in October 2009. This was India’s first compact diesel SUV. The Rio was assembled here it was imported as CKD kits of ‘Zotye Nomad I’ made by Zotye Auto of China.
The vehicles was a poor copy of Daihatsu’s old Terios model from 1998. Despite being an early mover Rio failed to achieve significant success due to lack of marketing, poor service network and the bad perception that Premier made over these years as a outdated brand.
The Final Fall
The first bombshell dropped by Maharashtra Government in 2013 by prohibiting 20-year-old cars to drive around the state. This means a recognizable automotive symbol, soon will be disappear.
After that in 2018 Premier face major labour unrest. Around 220 permanent workers were agitated over non-payments. The workers took their case to the Pune Industrial court, where the company promised to clear dues by June 2018, but did not full-fill that.
At-last in December 2018, Premier filed bankruptcy and a journey of 74 years come to an end.
Conclusion
The early automobile market in India was extremely limited specially because of Licence Raj. Only about 20,000 vehicles per year were manufactured across the entire country in 65 different models. That time Indian Automotive industry was very small in size which result very low sales for both Premier & Hindustan Motors. This also meant less competition. Despite all of these there is no doubt that Premier Auto gave a significant contribution in shaping today’s Indian Automotive industry.
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