It was during this month 21 years ago when Peugeot dropped a bombshell and announced that it was exiting India. The news stunned the automobile industry, with employees, dealers, financiers and customers wondering what was in store for them.

November 1997 is so far off today that Carlos Tavares would much rather look at the future. As Chairman of the rejuvenated Groupe PSA, which manufactures the Peugeot and Citroen brands, he is quite upbeat about the India story, which is due to unfold over the next couple of years.

“So far, the Indian plans are moving very fast and very well. I can tell you that our powertrain JV will start producing gearboxes next year,” Tavares told this writer during a roundtable with journalists at the recently held Paris Motor Show.

He added that PSA was on track to deliver “on our initial plans and the programmes that we are now developing are also on track”. The French auto-maker would very soon decide the date at which they will launch those car programmes and then make an appropriate announcement.

“Of course, we are making sure that we are synchronising the developments of the products on one side and the development of the network from the other side because both need to happen at the same time,” reiterated Tavares.

After all, it did not want to face a situation where dealerships would end up waiting for the cars or, conversely, cars were ready but not the dealerships. “We need to synchronise both, sourcing and development of the products on one side and the network creation from the other side,” added the PSA chief.

It was in April 2016 when Tavares officially unveiled the India plans and drove home the point that this was an important part of the global strategy. Since then, PSA stepped on the gas and soon announced its alliance with the CK Birla group, which will see cars produced from the latter’s facility near Chennai. According to the initial projections, there will be 17 product launches in the India Pacific region before end-2021.

“I believe that by early next year we will announce the date when we will launch our new programmes. So far it is going very well and we are very happy with our partnership in the Birla group,” said Tavares at the roundtable.

According to him, the script has been going according to plan so far. “Once or twice a year, I visit them to make sure that we are on track and so far things are moving well,” he said. It now remains to be seen when the cars will eventually hit the roads and indications are that this could be towards 2021 as articulated in the April 2016 presentation.

PSA will clearly be keen on leveraging India’s competencies in costing for its worldwide requirements. There is also a strong possibility of exporting cars to Latin America and South Africa as part of the emerging markets strategy. There is a separate blueprint that is in place for ASEAN and it is very likely that its Chinese ally, Dongfeng, will be part of this plan.

Tavares will also be only too aware that this is an intensely competitive market where two players — Maruti Suzuki and Hyundai — account for a combined share of nearly 70 per cent.

Honda and Toyota are perhaps among the relatively stronger brands with the others struggling to make their presence felt.

Skoda will lead a resurgence for the Volkswagen group with its India 2.0 plan, which will see competitively priced vehicles roll out of an all-new platform that has been developed specifically for India. It is into this arena that PSA will step in and hope to make a difference.

Tavares is, of course, no stranger to India thanks to his previous leadership roles at Renault and Nissan where he got the opportunity to understand the dynamics of this market. He will also be aware of the fact that the onset of Bharat Stage VI emissions regulations will usher in a host of changes. Beyond cost challenges in technology, there will also be new alliances in the form of Toyota-Suzuki, which could alter the competitive landscape.

Yet, the following decade will be tumultuous for the global automobile industry thanks largely to disruptions in the form of connected/autonomous cars, electric mobility and so on. There are also geopolitical uncertainties to deal with like Brexit where carmakers like PSA, which recently acquired Opel and Vauxhall, will have their work cut out.

India is on its way to becoming the third-largest automobile market globally after China and the US but the big volumes are still elusive. It has also been seeing sluggish growth lately thanks to issues like high fuel prices and poor market sentiment.

Going forward, global car-makers are hopeful that fiscal sops offered to sub four-metre compact offerings will soon become a thing of the past. Their argument is that these are rules which are specific to India and come across as an obstacle to their global aspirations and building economies of scale.

PSA will be monitoring the landscape carefully and it will be interesting to see if the French auto-maker contemplates reviving the Ambassador brand name considering that it bought the rights from its ally, the CK Birla group.

And even as November is the month when Peugeot first bid India adieu over two decades earlier, that is water under the bridge now. It has faced far tougher headwinds in recent times, which led to Dongfeng Motor throwing a lifeline with a 14 per cent stake.

Today, a stronger PSA has quickly snapped up Opel and Vauxhall, with India being the next big frontier. Since the time it shut shop in ’97, there have been at least two come-backs that failed to take off. This time around, Tavares will be keen to make a strong statement.

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