French auto major PSA Group (Peugeot and Citroen) has ventured with New Delhi-based CK Birla group to mark its re-entry into the Indian market. India is one of the fastest growing markets which is all set to become world’s third largest automotive market in coming years. The PSA group has been missing from such potential market since the late 1990s but it seems the French auto major can’t afford to ignore India anymore. The firm is expected to make an official announcement soon.
The French daily Newspaper Les Echos also reported that new venture will integrate the Hindustan motor plant in Chennai which is owned by Birla family. The plant has a current annual production capacity of 12,000 units which could be increased by decennial. Earlier, the brand was in talks with domestic carmaker Tata motors to re-enter India but the deal seems to be withdrawn.
Just to remind, Peugeot in its first attempt tied up with premier automobiles and sold Peugeot 309 in India. But with a draught of buyers, labour unrest and poor after sales network Peugeot has had a tough initial phase. The brand made its second attempt in 2011 when it had acquired land to set up its own production plant with a capacity of 1,70,000 units. However, the idea goes in vein due to financial turmoil.
During the Press conference at last year’s Paris motor show, Carlos Tavares CEO of Peugeot has said that brand is eagerly looking for joint ventures and collaborations to enter India. Earlier in April 2016, PSA had revealed Push to pass growth plan for the 2016-2021 period and India is an important part of the plan. India could play a vital role in brand’s vision and the brand seems to quite zealous to encash India’s growth by making its re-entry.