Citroen eyes the world while readying India launchpad

Murali Gopalan | Updated on: May 23, 2019

The French auto brand is keen to spread its presence from India to ASEAN and Latin America

Linda Jackson clearly has huge global plans for Citroen and this is where India will play a critical role in the coming years.

This will particularly become evident in the first half of the following decade when the French auto brand will have launched a slew of products in India that will be sold both in the domestic market and shipped overseas.

As CEO of Citroen, which is part of Groupe PSA, Jackson is more than aware of the potential in other emerging markets even while she does not get into specifics. “The idea is to become more international beyond Europe,” she says.

For now, France and China are the key markets for Citroen but it is only natural that India will be a centre of gravity going forward. It is already on its way to becoming the third-largest car market after China and the US.

By the time Citroen will have finished its first flush of products for India in 2024-25, the overall market size for cars and SUVs could be in the region of six million units. Jackson makes known that the Citroen sales target for 2021-22 globally is 1.5 million units (up from one million) but India will hardly feature in this portion.

Nine-year plan

It is only after this when Citroen will have one new launch every year after the C5 AirCross SUV that the presence of this market will be more significantly felt. Chairman of Groupe PSA, Carlos Tavares, recently announced that he would present a nine-year strategic plan between 2021 and 2030 once the present ‘Push to Pass’ plan draws to a close in the next couple of years.

It is logical to assume that India will feature prominently in the nine-year plan as one of the key pillars for Groupe PSA in the Asia-Pacific region. On the imperatives of going global, Jackson says it is important to have a balanced portfolio. “If something goes wrong in Europe, I know there is a strong region to fall back on,” she adds.

At present, 20 per cent of Citroen’s volumes are generated outside Europe and this percentage clearly needs to double during the course of the following decade. Jackson is confident that the India story will pave the way for a larger presence eventually.

“France is our biggest market followed by China and India needs to be moving up the ladder,” she continues. In the process, it could also service other markets in the ASEAN region as well as Latin America though these are still early days yet.

ASEAN and global strategy

Groupe PSA is already working on an ASEAN strategy where Malaysia will be the pivot though there is no telling what could unfold once India begins firing on all cylinders and other economic bonanzas like free trade agreements with ASEAN also kick in.

For Citroen, the India chapter is part of a larger global strategy and a long-term process “which will involve image build-up and a new launch happening every year”. Jackson is thinking big but balances ambition with circumspection.

After all, these are not the easiest of times for the automotive industry and her boss, Tavares, has constantly spoken of chaos across the world. Trade wars between two powerful nations could throw things off balance while events like Brexit will not help the cause either.

Jackson says it is important for companies to be very agile in these tumultuous times. She also refers to the high levels of unpredictability all around as in the case of Europe, which was struggling till not-so-long ago but is back on its feet. Similarly, who would have thought that China, once considered invincible, is actually slowing down?

Groupe PSA is, incidentally, attempting to put its China house in order since things have not quite worked according to plan. Its ally, Dongfeng Motors, played a big role in helping the French auto brand emerge from an abyss five years ago when it truly seemed down and out. However, PSA has not been able to make much headway in China and this is something that will need to be remedied soon.

India roadmap

Getting back to India, Citroen will soon be kicking off talks with potential dealers. These are not the easiest of times for the industry especially with car sales up against severe headwinds. A whole lot of dealers are shutting shop simply because it is unviable to continues business.

This is where Citroen is planning a more pragmatic retail model called ‘La Maison Citroen’, which will not involve a sprawling area to display cars but will only have a couple of them on show. The rest of the ecosystem will be a digital world where customers can browse around on screens and decide which model they would like to buy.

The idea is working to a charm in markets like France, Australia and Korea even while the conventional dealerships coexist with this model. The interiors of La Maison Citroen are colourful, yet elegant, and the idea is to enhance the car buying experience for customers.

Citroen will replicate this format in India and this will hopefully be a win-win situation for everyone concerned, right from the company to the dealer and customer. The reasoning is that young Indians are tech savvy and prefer the digital world experience to the conventional brick and mortar model as evident in the frenzied pace of online buying.

Sure the concept of the entire family being involved in the car purchasing exercise still exists but individualism is also taking over in a big way. Dealers will welcome this route (Volkswagen has kicked off a similar project in India through its Pop-up Stores) as investments will be much more manageable.

Customers seeking greater privacy while buying cars will be delighted with this option. The challenge eventually is to ensure that sales grow and Citroen has a winning proposition on its hands.

The writer was in Paris at the invitation of Citroen

Published on May 23, 2019
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