PSA Group’s Peugeot is likely to return to the Indian automobile industry. PSA is Europe’s second largest car manufacturer and under Carlos Tavares, the French multinational has improved sales over the past 18 months. It ended 2014 on a high, registering 2.939 million sales and 4.3 per cent growth.
PSA is looking to expand its operations overseas and one of its projects will be to bring the Peugeot brand to India. It has already “commissioned a study for the purpose”.
A spokesperson for PSA told the Economic Times, “PSA has implemented a new organization by regions. India-Pacific region shows India’s importance to PSA. But at this stage, there’s no decision for a rapid return to India.”
Peugeot’s recent boost in sales has been owing to its effort to reduce the cost of production. However, with the current import duties on cars in India standing at more than 100 percent, Peugeot could take till 2020 before it introduces its passenger cars.
It will start by selling two-wheelers in partnership with Mahindra, which acquired 51 percent stake in Peugeot Motorcycle (PMTC) last year. The two-wheelers will be produced in India itself. Mahindra has previously helped manufacturers like Renault and SsangYong create a base in India and it could facilitate Peugeot in a similar way.
“The plan is to have the entire group’s presence in India right from two-wheelers, passenger vehicles to light commercial vehicles in the medium term. Immediate focus will be on two-wheelers, and with the help of Mahindra & Mahindra, the company will try to establish its presence by 2017 and build Peugeot brand, before expanding to passenger vehicles by 2020,” a source told Economic Times.
Peugeot already has a brief history with the Indian automotive industry. After the liberalisation of the Indian economy in the nineties, Peugeot was one of the first foreign car companies to enter the Asian country. It produced a few thousand models of the Peugeot 309 but its relationship with its partner Premier Automobiles Limited strained and Peugeot left India in 2001.
It planned on introducing the Peugeot 307 with Tata the same year but things never materialised.
Later on, after a decade of research and consultancy, in 2010, Peugeot purchased some land in the western state of Gujarat to open a manufacturing facility for its Asian models of the 504. Despite setting up offices in the country as well, Peugeot failed to make the payment for the land it acquired for Gujarat in time, leading to the government taking back the area. Since then, the company has been out of the Indian market.
[Via Economic Times]