Report - Peugeot plotting its second comeback to India

02/07/2014 - 19:23 | ,  ,   | Nithyanandh K

After its joint venture with Pune-based Premier Automotive, that promised much, wound up in 1997, PSA Peugeot Citroen Group attempted to enter India alone in 2011 with an investment of INR 4,000 crore. However, the severe Euro crisis didn't allow the ambitious Indian project to progress beyond the ground breaking ceremony for the proposed manufacturing plant in Sanand, Gujarat.

The Group is undergoing a comprehensive restructuring exercise to spring back under the leadership of Carlos Taveras, the former right hand man of Renault-Nissan CEO Carlos Ghosn. Now, Financial Express reports that Peugeot is plotting its comeback to India and the automaker's team based in Pune has been exploring various options over the last few months to device an effective plan. The company is likely to resort to a contract manufacturing arrangement with its global partner General Motors in a bid to reduce the initial investment, the report says.

Peugeot 2008 Geneva Motor show live
Peugeot's renewed plan to enter India could have a different product strategy. (Image: Peugeot 2008)

GM India operates two manufacturing units, one at Talegaon, Maharashtra and other at Halol, Gujarat. The Talegaon facility which manufactures the Chevrolet Sail Twins and the Beat has an annual capacity of 1.7 lakh units out of which only around 25% is being utilized.

Alternatively, Peugeot could also explore the possibility of setting up a plant in Maharashtra or Tamil Nadu in partnership with the Chinese automaker Dongfeng Motor Corporation which, along with the French government, invested over a billion Euros in Peugeot in April 2014.

Peugeot recently created a new designation called 'Operational Director, India-Pacific zone' which confirms that India is high on the company's priority.

In its previous attempt, Peugeot had a top down approach in mind for India, starting with the flagship 508 sedan, that even completed its on-road tests. The company had presented this model and a half a dozen other exhibits at the 2012 Auto Expo. Given that the market has swerved towards compact crossovers since 2011, there could be a new product strategy in place. The Peugeot 2008 compact SUV could take precedence this time seeing fellow Frenchman Renault crack the market with the Duster.

As plans are still in the early stages, it's difficult to predict the time-frame of Peugeot's Indian re-entry.

[Source: Financial Express]

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