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They are both French car-makers with over 40 per cent of their sales coming from outside Europe. But here the similarity ends.
PSA Peugeot Citroen was among the earliest entrants to India but exited within just three years. Renault came in much later, almost lost its way but is now firmly on track.
Re-entry ‘rescheduled'
PSA declared its results for 2011 on Wednesday and profits were predictably lower than the preceding calendar. As part of its cost-cutting drive, it has ‘rescheduled' its re-entry plans for India. As a result, the projected annual target of 1.7 lakh cars by 2015 from Gujarat plant will take longer to reach.
Renault's results followed a day later and, as in the case of PSA, presented a grim outlook for Europe in 2012. However, it was upbeat on its India prospects — a remarkable turnaround from the Logan days when nothing went to plan.
From PSA's point of view, the good news is that the derailment of its India project has not altered its target for non-Europe regions accounting for 50 per cent of numbers by 2015 and two-thirds by 2020. Brazil, Russia and Latin America have been identified as the key growth drivers though it remains to be seen how long this can be sustained without India, tipped to be the world's third largest automobile market in 2020.
During 2011, while PSA's volumes in Europe were down six per cent to 2.06 million units, Russia grew 35 per cent to 75,000 units and Latin America by 11 per cent to 3.26 lakh units. China, its most strategic market by numbers, was up seven per cent to 4.04 lakh units. Volumes in other parts of the world increased by 11 per cent to 2.26 lakh units and the overall business beyond Europe grew to 42 per cent last year (39 per cent in 2010).
As for Renault, while sales in Europe fell 5.7 per cent to 1.5 million units, the rest of the world more than made up with 43.1 per cent of the 2.7 million vehicles sold in 2011. The French automaker is now keen on increasing its market share in Brazil and Russia to eight per cent apiece by 2016 from the current 5.7 per cent.
Likewise, an aggressive strategy is planned for India post the Logan debacle. While the Fluence, Koleos and Pulse have been launched, the Duster and a sedan will follow this calendar.
Rough patch
Will PSA also be able to fire on all cylinders in India? At the moment, it is going through a rough patch where cash conservation is top priority. Its cost reduction target for 2012, for instance, is one billion euros.
According to observers, a strong ally makes all the difference. Nissan has been the best piece of news for Renault for over a decade now.
PSA had explored an alliance with Mitsubishi and is now being wooed by Fiat. What it However, the needs now is a partner with strong financial muscle and till this happens, India may just have to wait for PSA's return.
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