PSA rekindles make-in-India plan, likely to tie up with CK Birla Group

The PSA Group is understood to be taking a serious look at manufacturing cars in India, this time around with a joint venture with the CK Birla Group.  

According to a report in the French financial daily, Les Echos, the PSA Group has inked an alliance with the CK Birla Group to make a new entry into the Indian market. Specific details of the tie-up are likely to be given on Wednesday morning by Carlos Tavares, chairman, Groupe PSA. PSA, according to the French newspaper, has refused comment for the moment.

As per the plan, the two new partners will set up a joint venture which will integrate the Hindustan Motors plant in Chennai.

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 in 'Push to Pass' growth plan

The PSA Group had in April 2016 revealed its aggressive ‘Push to Pass’ growth plan for the 2016-2021 period. India is part of this plan as per which the carmaker is targeting a partnership deal by 2018 and a product launch before the end of 2021.

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".

It is likely the French carmaker has advanced its India entry plan and is now tying up with the CK Birla Group. Stay tuned for more details.