The deal was closed at the end of last week, with the PSA Group paying the CK Birla Group, owner of Hindustan Motors, 800 million rupees ($16 million) for the Ambassador brand.
The last Ambassador rolled down the line in 2014 after 56 years in production in India. Thanks to India's tightly controlled economy in the decades after independence, automotive choices were limited, and the lightly modified Morris Oxford Series II proved to be popular up until the 1980s when it began to be overtaken by the more modern Suzuki Maruti 800, a localised version of the Suzuki Alto.
Many Ambassadors survive until this day and can still be found plying the streets as taxis.
It's unclear what Peugeot plans to do with the Ambassador name. According to The Times, the company briefly sold cars in India during 1990s, and has plans to return to the country by 2018.
Last year, Peugeot signed a deal to use CK Birla's Hindustan plant in Chennai. The factory currently produces Mitsubishi vehicles, and has a capacity of 12,000 vehicles per year.