Groupe PSA has had a long association with the CK Birla group in the past and is geared up to start a new inning.
The Indian car market is undoubtedly one the most lucrative car markets today in the world and the recent influx of carmakers from different geographies like MG Motor from China and KIA Motors from South Korea just emphasises how well the automotive industry is doing in the country. The latest automotive giant to enter India is Groupe PSA (Peugeot S.A.) and it has already announced that it will be launching the Citroen brand in the country by 2021. The decision to enter the country comes at a time when the group plans to explore other markets and procure about 50 per cent of its volumes from developing countries. As part of its expansion plan, alongwith India, the French carmaker is also planning to launch the Peugeot brand in North America while brand Opel will be making its debut in Russia.
Of course, the PSA group has been part of India before as it was selling its cars in our market. The Group has had a long association with CK Birla Group that owns Hindustan Motors (HM) in the early 1990s. Peugeot, in fact, had later entered into a partnership with Premier Automobiles Limited (PAL) in to sell the Peugeot 309 sedan. However, the collaboration didn’t last long due to cost and supply constraints coupled with inadequate demand and was called off in 1997. The last we know was that HM was selling the venerable Ambassador brand to Groupe PSA for ₹ 80 crore in February 2017 as it needed the money to pay off debts.
However, it’s a fresh inning for both the parties and the announcement comes two years after PSA again entered into a joint venture with the CK Birla group to set up its infrastructure in India and is now working to launch Citroen by 2021. The JV had inaugurated a manufacturing plant in Hosur, Tamil Nadu last year which can manufacture up to 200,000 units of powertrains and 300,000 units of transmissions. Groupe PSA has so far invested around ₹ 600 crore in the plant and the vehicle assembly plant has a target to manufacture 50,000 units in the first year of operation which will also include exports.
Citroen was founded by Andre Gustave Citroen in 1919 with the launch of its first model- the Type A which scaled up to 10,000 units just in a year. It further went to become the fourth largest carmaker in the world in 1927 producing 50,000 units annually. However, the volumes started tapering after World War II and the brand needed some external help, which is when Fiat acquired 30 per cent stake of Citroen in 1976. Three years later in 1979, it formed a parent company- PSA Peugeot Citroen which at present is the second largest European carmaker and ninth largest in the world. Citroen’s positioning is more upmarket than the Peugeot similar to the way we see Volkswagen being slightly premium than the Skoda. Furthermore, Citroen also announced its luxury brand- DS Automobiles in 2009 which went on to become a standalone brand worldwide in 2015 and is one of the arch-rivals to the German trio in the European market.
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As of now, the French carmaker hasn’t confirmed any model for the India launch, but several crossovers and SUVs have been spotted testing here. Recently, the Citroen Aircross C5 was spotted testing in India which, if it comes, will rival the likes of the Jeep Compass and Hyundai Creta. Moreover, the DS7 Crossback was seen doing rounds in India as well which hints it is under consideration as well. The DS7 Crossback competes with the BMW X1, Mercedes GLA, Audi Q3 and Volvo XC40 in European markets.
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