Hindustan Motors on Monday launched a new variant of its old workhorse Ambassador, which, it hopes, would increase sales of the car by nearly 29 per cent to about 18,000 units this fiscal.

Christened Ambassador Grand, the car would be offered with both petrol and diesel engines sourced from Japan's Isuzu Motors, Satish Burman, vice president (marketing), Hindustan Motors, told a news conference in New Delhi.

The 1.8-litre petrol engine model has been priced at Rs 420,000, while the 2-litre diesel model has been priced at Rs 445,000 (both ex-showroom Delhi).

"This fiscal, we have targeted to sell 17,000-18,000 Ambassador cars. Last year, we had sold 14,000 units. Of this, the new variant should comprise 2,000 units," he said.

The car has features like power steering, power brakes and remote shift gear, new grille, transparent headlamps, body coloured bumpers besides the new Hindustan Motors logo.

Stating the Ambassador as a 50-year old car, which is as contemporary as any other new vehicle, Burman said it would be targeted at "niche" buyers like the government, professionals, luxury hotels and for export markets.

The company plans to launch another variant of the car called Avigo sometime this year, he said adding, 26-28 per cent of total sales of the Ambassador comes from government orders.

He cited "space, comfort and sturdiness" as the main selling points of an Ambassador car and claimed that it was the third highest selling mid-size car in the country.