Peugeot likely to enter India by 2018-19

With the improvement in its financial performance under the Carlos Tavares-led restructuring plan, French carmaker PSA Peugeot Citroën is planning to be back in India to join the race.

The OEM could enter the Indian market by 2018-19. Unlike the last time around, the entry will not be through the CBU route. Peugeot had planned to enter the India market with its 508 sedan before financial woes spoilt the company’s India market game-plan.

Shashikant Vaidyanathan, director, Peugeot Citroën India, told Autocar Professional that the company is weighing options to assemble/manufacture cars in India. While the plan is to eventually produce cars locally, the entry could be through the assembly or contract manufacturing route. In its earlier attempt, the company had zeroed in on Gujarat to set up a plant. Gujarat could still be the choice but other options are also open, says Vaidyanathan.

The fact that Peugeot remains interested in India is reflected by the formation of a new India-Pacific business zone comprising of India, SAARC countries, Japan, Korea, Australia and New Zealand in September last year. This is the fifth geographical business zone of the company and the only one without a single manufacturing unit. It is likely that Peugeot is looking at setting up one in India for both the domestic and export markets. Late last year, the company shifted its India office from Ahmedabad to Pune.

It may be recollected that on November 4, 2011 , Peugeot had marked its re-entry into the Indian market, 14 years after its exit in 1997, by conducting a bhoomi puja and a ground-breaking event at the site of its planned factory in Sanand, Gujarat. The plan was to set up an engine and gearbox plant spread across 600 acres along with a suppliers’ park, amounting to a global investment of Rs 4,000 crore, which would have led to the creation of 5,000 new jobs in the auto industry. The plant was to have had an initial capacity of 170,000 vehicles per annum with the premium 508 saloon the first car to be assembled. Subsequently, due to re-alignment of the French carmaker’s global plans, the India programme was put on the backburner.