Peugeot targets partnership in India by '18, product launch by '21

French car major PSA Peugeot Citroen, which has renamed itself as Groupe PSA today, is set to return to India. And this time with perhaps a sustainable plan as the entry is part of the company's aggressive "Push to Pass" growth plan for the period 2016-2021.

The plan was announced by Carlos Tavares, chairman, Groupe PSA. India is part of this plan. The company is targeting a partnership deal by 2018 and a product launch before the end of 2021.

Autocar Professional had reported on June 10,2015 about Peugeot's plan to enter India by 2018-19 through the assembly or contract manufacturing route. There was also a newspaper report in October 2015 that the French company was in talks with Tata Motors to re-enter India. In its first innings in India, which ended in late 1997, Peugeot had partnered Premier Automobiles. The second attempt was made independently in 2011 with a plan to set up a plant with an initial annual production capacity of 170,000 units. Financial woes forced the company to put it in the backburner.

But the Indian market continued to attract Peugeot's interest. In September '14, the French carmaker formed a new 'India-Pacific' business zone comprising of India, SAARC countries, Japan, Korea, Australia and New Zealand. This is the fifth geographical business zone of the company and the only one without a single manufacturing unit. It is likely that Peugeot may now tap the India base for both domestic and export markets.

India, which is expected to become the world's third largest car market by 2020, could well play a crucial role in Groupe PSA's vision to be “a great global carmaker with cutting edge efficiency and the preferred mobility provider worldwide for lifetime customer relationship". The "Push to Pass' plan is the first step in this direction.

"Frugal R&D expenditure and rigorous control over production costs as well as fixed costs" is a key base for the new growth plan. India could play an important role in this regard, like it has played in the case of another French company, Renault and other car majors like Suzuki and Hyundai.

Some of the key objectives of the "Push to Pass" growth plan are:

-   Reach an average 4 percent automotive recurring operating margin in 2016-2018, and target 6 percent by 2021.

-   Deliver 10 percent group revenue growth by 2018 Vs 2015, and target additional 15 percent by 2021.

-   High-quality products and services, basis for the brands pricing power.

-   A product blitz, built on 26 passenger cars and 8 light commercial vehicles, including a 1 ton pick-up, leading to the launch of “one new car, per region, per brand and per year”.

-   A rich and sharp core technology strategy, notably shaped by the launch of 7 plug-in hybrids and 4 electric vehicles, and the deployment of the connected and autonomous vehicle programme.

Groupe PSA saw a turnaround in its performance under the "Back in the Race" plan. And the new plan is aimed to "help ensure profitable growth in all the regions where the group operates".

Also read: PSA Peugeot Citroën unveils five-year growth plan