Attempting to “internationalize” its automotive brand aggressively outside the crisis-ridden Euro-zone, leading French carmaker PSA Peugeot Citroen on Thursday said it will introduce its products in the New Delhi Auto Expo in January 2012 and roll out new cars from the upcoming Sanand plant in 2014.
Mr Jean-Raphael Peytregnet, the Consul-General of France in India, said Peugeot’s is a symbolic re-entry of French companies into this country. Peugeot had exited from India in the 1990s, annulling its joint venture with Premier Automobiles Ltd (PAL) and stopping operations in this country.
Promising a “competitive” price band, it will produce premium segment vehicles for the upper middle class Indians. It will not make any commercial vehicles and concentrate only on personal ones.
At present, Peugeot’s car market share in India is “zero”, the company officials said, adding the company will elaborate its strategy in the Delhi Expo. But it will focus on C and B+ market segments to meet “the aspirations of the rapidly growing Indian middle class which has contributed to and benefited from India’s exceptional economic growth”. It will start with the production of C segment cars, like C-508, followed by four other models for Indian conditions.
Admitting that “46% of Peugeot’s global sales came from outside Europe in 2010 and first-half of 2011”, the company said it had zeroed in on four main areas of development—India, Latin America, Russia and China—where it invested 2.7 billion euros in recent years. “While our European market is stable, but we urgently wanted to come to India.”
India alone represents a new investment of 700 million euros, said Mr Gregoire Olivier, Member of the Managing Board and CEO of Asian Operations, and Mr Vincent Rambaud, Director-General, Peugeot, after the Sanand manufacturing facility’s bhoomi poojan and ground-breaking ceremony here.
The second largest European carmaker is constructing the Sanand plant in an area of 600 acres with an investment of Rs 4,000 crore (650 million euros). It will roll out 1.70 lakh cars per annum from 2014 and double the capacity in 2018. Through a public-private partnership (PPP), it will also set up an Automotive Skills Development Institute (ASDI) within the Sanand automotive cluster where it will train about 5,000 people by 2013 to join Peugeot.
Peugeot’s India plan was confirmed in February 2011 and it signed a State Support Agreement (SSA) with the Gujarat Government on September 1. The Sanand plant will be its seventh globally. It now has five vehicle manufacturing factories and two engine and gearbox facilities.
The R&D for Sanand plant will be slowly shifted from Europe to India. They said Peugeot is launching the diesel hybrid cars in Europe which it will import into India as well. Most of Sanand produce will be sold domestically but it will also export some right-hand driven cars to countries like Australia, ASEAN nations and other. The Sanand plant will achieve about 8% localization by 2015 and will have a vendor park next to it. It will also produce one lakh gasoline engines and, for now, source diesel engines from outside.
Since 2008, Peugeot is the fourth car major to park in Gujarat. While General Motors came at Halol in the 1990s, Tata Motors relocated from Singur (WB) to Sanand in 2008, followed by Ford, Peugeot and Maruti (all in 2011). Since 2008, these car-makers have planned investments to the tune of Rs 28,000 crore, including Maruti Suzuki's Rs 18,000 crore, in Gujarat. However, Maruti's work is expected to begin only in 2013.