The PSA Group is looking to return to the Indian market with the Peugeot brand. The French manufacturer has signed an agreement with Delhi based CK Birla Group. The partnership entails two joint-venture agreements between the PSA Group and the CK Birla Group companies. As part of the first agreement, the PSA Group will hold a majority stake in the joint-venture company being set-up with HMFCL for the assembly and distribution of PSA passenger cars in India. As per the second agreement, a 50:50 joint-venture is being set-up between the PSA Group and AVTEC Ltd for manufacture and supply of powertrains. The manufacturing sites for both vehicle assembly and powertrains will be based in the state of Tamil Nadu.The initial manufacturing capacity will be set at about 100,000 vehicles per year and will be followed by incremental investment to support a progressive ramp-up of the long term project.
The manufacturing capacity for powertrains will cater to the domestic market needs and global OEMs. The performance of the industrial set-up will be supported by a significant level of localization, in order to reach the necessary cost competitiveness.This long term partnership will allow both companies to participate in the growth of the Indian automotive market, which is expected to reach 8 to 10 million cars by 2025(1) from current 3 million in 2016.Commenting on the agreements, Carlos Tavares, Chairman of the Managing Board of PSA Group said: “Benefitting from the strong support of our Indian partner, the CK Birla Group, and a shared vision, this project is consistent with the strong execution of our Push to Pass strategic plan and represents a major step in PSA Group’s worldwide profitable growth in key automotive markets.”