MORE than a decade since its last beleaguered outing in India, the € 56-billion PSA Peugeot Citroen, Europe's second largest car maker, is looking at a possible re-entry into the Indian market with its range of small cars and mid-segment sedans.
According to automobile industry sources, the company is conducting a feasibility study for various products in the 1.4-million Indian passenger vehicle market. A four-member team from PSA Peugeot Citroen is scouting for various options in India and has held negotiations with various automobile bodies like the Society of Indian Automobile Manufactures (SIAM), Automotive Component Manufacturers Association of India (ACMA) and various component makers from southern India.
The team is expected to submit a report to the company board in Paris on its India plans. The group, which has a 5.2% share of the global automobile market and controls 14% marketshare in Europe, has been looking at workable options in India.
Speaking to ET, PSA Peugeot Citroen strategy and innovation head Dominique Rampazzo, who was in India recently, said: ”We have not decided on a formal entry into India. We have not firmed up any plans yet. India is a great market and very vibrant but we cannot commit anything now.”
The company sources components from India in small quantities. It has a small sourcing agreement for automotive components with the Amalgamation group. The company is also planning to participate in the Auto Expo in January 2008, though in a small way. “We will be there and will take a close look at the vibrant Indian automobile industry, though we may not showcase any of our vehicles or products,” Mr Rampazzo added.
PSA Peugoet Citroen is active in various emerging markets. It has committed huge investments to develop its market presence and sales in South Africa, Iran, (through Iran Khodro) and China (Dongfeng Peugeot Citroen Automobile) in recent years.
This isn’t the first time the French major is contemplating a re-entry into India. Around four years ago, group company Citroen had initiated studies for a CBU operation in India but the plans fizzled out.
Peugeot had set up a joint venture with the Doshi family, the makers of Premier Padmini, in 1995 to make the Peugeot 309 range of vehicles in India. However, it exited the market because of differences with the Doshis. Its three-year stint in India was marked by labour trouble, leading to a plant lockout, shortage of completely-knocked down kits (CKD) of its midsegment sedan Peugeot 309 and finally a showdown of the plant after a legal battle with the Indian partner