Companies

Groupe PSA to take a ‘frugal’ drive into India with Citreon brand; not to chase volumes

Our Bureau Chennai | Updated on April 03, 2019 Published on April 03, 2019

Linda Jackson, CEO, Citroen Brand, Groupe PSA, and Carlos Tavares, Chairman of the Managing Board, showcasing the company’s flagship vehicle Citroen C5 Aircross SUV, in Chennai   -  Bijoy Ghosh

Its premium SUV C5 Aircross will be the first to arrive late next year

French car maker Groupe PSAon Wednesday formally announced a “carefully worked out” plan for the Indian market. Europe’s second largest passenger vehicle group by volumes hopes to stay afloat with profitable growth, instead of chasing volumes and market share.

The company plans frugal investment initially. Local design and manufacturing, fresh products, higher localisation, sourcing of parts for exports and a stronger focus on service are some of the major features of its India plans.

Groupe PSA owns six vehicle brands . It has chosen to grow in India with vehicle launches under Citroen brand.More than a million vehicles were sold globally in 2018 under Citroen brand.

The company is adopting a top-down approach for its product launches as its first product will be Citroen C5 Aircross SUV, a premium SUV that was launched in Europe a few months ago.

The formal launch of the new 4.5 mtr SUV, which was showcased here, will be built in India with an expected localisation level of 95 per cent. It is likely to hit Indian roads in later part of 2020.

The company will launch one all-new model, designed and made locally, every year in India after 2020.

These new products will hit India first before going to other markets.

It is targeting all segments – SUVs – both small and big-- sedans and hatchbacks as also a new segment product.

The company has already tied up with CK Birla Group for the manufacture of vehicles at Thiruvallur, near Chennai, and powertrains at a greenfield unit at Hosur, near Bengaluru. The facilities will have production capacities of one lakh vehicles, three lakh gear boxes and two lakh engines.

“We don’t choose the timing and there is no perfect moment. What we are saying today is a long-term commitment. This is the beginning of a great journey. We have been working on this plan for at least for three years,” said Carlos Tavares, Chairman of the Managing Board, Groupe PSA

Stating that the company would aim for a conservative market share of about 2 per cent in 4-5 years, the management said it would not chase market share but would focus to stay in the black with an asset-light model. The company is adopting a frugal investment plan in the initial term as it hopes to invest more on products than in manufacturing and other related areas.

Linda Jackson, Chief Executive Officer, Citroën Brand, Groupe PSA, stated that the company would bank on offering unique design and great comforts in many dimensions in its products to differentiate itself from the rest. Also, it hopes to be competitive in terms of pricing due to higher local content, particularly the localisation of powertrains.

“Citreon brand will be affordable, but not cheap,” said Emmanuel Delay, Executive Vice-President & Head of India-Pacific, Groupe PSA

Dealerships coming up

Dealerships are to come up at NCR, Ahmedabad, Mumbai, Kolkata, Pune, Hyderabad, Bengaluru, Chennai and Kochi from July onwards. According to a document of the Tamil Nadu government, PSA Group has committed to investing about ₹1,250 crore in its facilities in Thiruvallur and Hosur.

Tavares indicated that the company would evaluate the opportunities for the re-launch of the Ambassador car, which was acquired by PSA from CK Birla Group. But no concrete plan as yet, he added.

Published on April 03, 2019
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