Peugeot to Make India Comeback

Peugeot to make India comeback through partnership with CK Birla; a slew of product launch is expected by 2020

Peugeot, an evocative automobile manufacturer, whose brand perception has not been derailed yet in the Indian market is all set to be making a comeback. As expected, the French automaker, which has significant presence in the European market, will re-enter India through a joint venture with CK Birla Group.

PSA Group, owner of Peugeot and Citroen, has penned two joint venture deals with CK Birla Group (that runs Hindustan Motors). Under this synergy, the two companies will manufacture and sell vehicles in the domestic market by 2020. Claimed to be a long-term association, the agreement will see an initial investment close to €100 million (approx Rs. 700 crore) in India.

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Peugeot 2008

It will be utilised to establish vehicle assembly and powertrain producing plants in Tamil Nadu. Part of first deal is that the PSA Group will be responsible for a majority stake in the JV company which will be arranged with HMFCL (Hindustan Motors Financial Corporation Limited).

It will be accountable for the assembly and distribution of PSA passenger vehicles in India. The other 50:50 JV will be in control of production and supply of powertrains for PSA-branded vehicles. It is between PSA Group and AVTEC (subsidiary of JK Birla) that makes precision engineering products and manufacture powertrains. An annual capacity of 1,00,000 units are targetted as PSA Group hopes for significant levels of localisation to make a huge impact in the market price-wise.

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Peugeot 508

India is undoubtedly one of the fastest growing automobile markets in the world and Peugeot will certainly be looking to pick up where it left off in the late ‘90s. PSA is making huge steps to recover from the endured bankruptcy a few years ago.

This exciting news stands in accordance with the plans PSA Group chairman Carlos Tavares revealed at a global event in last April. He explained that an array of products will be launched in early next decade ensuring a primary focus on India in its global map. The rumours of Peugeot making a second attempt at the Indian market have come and go in aplenty.

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At the beginning of this decade, Peugeot had plans to set-up a manufacturing facility in Gujarat. Embroiled in financial turmoil, it did not come into fruition as the company sought for more stabilised governance. With Chinese firm Dongfeng Motor at the helm, Peugeot is a much healthier outfit than it ever.

Carlos Tavares was a former Chief Operating Officer at Renault and he may insist on following the local strategy of his former employer by bringing in stylish small cars incorporating a fuel efficient engine and packed with features. PSA took the opportunity for granted when the then new reforms meant multinationals can make sustainable business in India in the early ‘90s.

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Despite entering at the earliest partnering Premier Automobiles, its exit from India was a complete shocker after just four years. Later, a comeback with Tata Group had also fallen off the cliff. With fresh investments and products like 108, 208 and 308 Peugeot could surprise when it gets back into contention in India by 2020.