China high on Peugeot's priority list

Murali Gopalan Mumbai | Updated on February 10, 2011

PSA Peugeot Citroen finally confirmed its India plans on Wednesday where the first model will be a mid-size sedan with the Peugeot badge that will also be produced in China and Europe.

In his presentation, ‘Progress on our Ambitions', Mr Philippe Varin, Chairman of the Board, said the Group was on course to achieving 50 per cent market share (by volumes) beyond the geographies of Europe by 2015. The biggest growth drivers here will be China, Russia and Latin America, which have contributed to 39 per cent thus far.

In this context, India could end up playing a key role though its impact in terms of numbers is likely to be felt only beyond 2015 when PSA would have got into full-fledged manufacturing. For now, Mr Varin hinted that the group would take ‘a significant step forward' this year.

A beginning has been made through the setting up of a Mumbai office but the bigger task of zeroing in on a plant still needs to be completed. There have been reports doing the rounds that PSA would be more inclined towards the South where the toss up will be between Tamil Nadu and Andhra Pradesh.

“India is a key market and this new implantation reflects our ambition to become a global player. As in China, we will offer Indian customers vehicles adapted to their expectations,” said Mr Gregoire Olivier, Executive Vice-President of PSA Asia.

Mr Varin's presentation clearly indicates that China ranks high on the Group's priority list. The market share targeted for 2015 is 5 per cent, up from the present 3 per cent. A third plant is proposed to be set up in 2013.

China line-up

China will also be home to a large range of PSA vehicles which not only includes the sedan earmarked for India but cars from Peugeot (408 and 508), Citroen (C4, C5 and a new DS line) and light commercial vehicles.

For Latin America, PSA will launch eight vehicles over four years and is looking at a 7 per cent market share by 2015. In the case of Russia, plans are under way to launch C-segment cars and sport-utility vehicles.

In contrast, India may have little to do with the market share vision for 2015 where China, Russia and Latin America will play a bigger role in boosting PSA's non-Europe presence. Things could take an interesting turn if the global small car project with Mitsubishi of Japan emerges a reality here.

India project

It also remains to be seen if PSA will choose to go it alone or rope in a local ally for the Indian project. It was among the early entrants to the country in the early 1990s but was the first to call it quits when the business plan went awry and problems cropped up with its then local ally.

Will it be a case of too little, too late? The fact that the group has chosen to opt for the Peugeot badge clearly indicates that it has buried the demons of the past when it faced flak for exiting India the first time around. The challenge on hand is to get the numbers going and, like other multinational counterparts, think big for a global compact car.

Published on February 10, 2011

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