Peugeot plans to enter India again

French auto major PSA Peugeot-Citroen, the only global automobile brand that does not have a footmark in the country till date, is considering the Indian market for the third time. Peugeot's first attempt in collaboration with the Doshis of Premier Automobiles, collapsed in 2001, while the second try to re-enter the market in 2011 also failed because of some internal financial issues.

“PSA is exploring ways to better exploit the potential of the Indian market for the group. At this stage, there is no question of resuming the project (Gujarat plant) in India,” said Pierre-Olivier Salmon, an official with PSA’s France-based communications team.

Under its ‘Back in the Race’ growth strategy, the manufacturer has been analyzing many options over the last few months. But the final reports suggests that Peugeot will most likely to stick with the contract manufacturing tie-up with its global partner General Motors (GM) to reduce upfront investments. Currently Mitsubishi and Isuzu already use the same contract manufacturing route, while all other auto majors present in India, run their own facilities to achieve cost-effective production.

Furthermore, ex-Nissan executive 'Emmanuel Delay' has been appointed as the new operational director for the recently created India-Pacific zone. Carlos Tavares, whom Delay will be reporting directly to, is believed to be very bullish on India because of his familiarity with the domestic market. Earlier, he had worked with Renualt India and was closely involved with the very-successful Duster project.

“There is a renewed focus on South Asia and Asian markets. India and other key South Asia markets continue to remain strategically important for the group,” confirmed Shashikant Vaidyanathan, head of PSA’s Pune-based India office.

General Motor's Talegaon plant, which Peugeot will most likely be using, currently makes the Sail, Sail U-VA and Beat models, and has an annual production capacity of 1.70 lakh cars, but it is only utilizing about 25 percent of it because of the market slowdown and lack of demand for Chevy cars.

Source : FE