Swaraj Baggonkar Moneycontrol News
PSA Peugeot Citroen, France’s largest carmaker, will make its India debut in late 2020 with the launch of the Citroen C5 Aircross SUV that will compete against current generation models like Hyundai Creta, Tata Harrier, Jeep Compass and Mahindra XUV500.
The group, which is the last of the big international automotive names to come to India, has promised to launch one new model every year after its first year. These models will be made and launched in India before being introduced in other parts of the world.
Speaking at its first press briefing in India, Carlos Tavares, Chairman of the managing board, Groupe PSA said, “India is an important next step for Groupe PSA as part of the Push to Pass plan to increase our international footprint and revenues. With the introduction of Citroen, our aim is to be ‘be Indian in India’ and our association with the CK Birla Group will be important to become a major player in the Indian automotive market”.
Known rather for its small car, Citroen which has largely remained a European brand will be focusing on the mainstream market segment where volumes play a key role in determining profitability. Unlike Honda, Nissan and Toyota who have preferred to remain premium in India the PSA Group has decided to allow Citroen to compete in the mass market segment.
PSA is looking to grab two percent market share in India within four to five years of its debut. “We don’t wish to declare that we have an aim of grabbing five percent of the market and not achieve it within the timeline. We would rather realistically target of two percent."
The group will make use of the 100,000 units a year production capacity in Tamil Nadu which will not just serve the domestic market but export market as well. The group will also establish a network for sourcing components and supplying them to its group operations worldwide.
Senior executives of the group also promised a highly localised operation in India where an average of 95 percent of the vehicle will be made in India from components sourced within the country. These will include powertrain (engines and transmissions) having a local content of 90 percent.
Until two years ago most international car companies had a local content of a maximum of 60 percent which forced them to price their products higher than competitors such as that from Maruti Suzuki, Hyundai and Tata Motors.
Ambassador update
The group is still unclear about the future of the decades-old brand Ambassador which it bought from Hindustan Motors two years ago for Rs 80 crore.
“We are still reflecting on how do we use the brand Ambassador and are yet to take a decision on it. We would rather use it where it should be rightly used rather than use it just like that considering the iconic status it has”, said Linda Jackson, CEO, Citroen brand, Groupe PSA.
Competition
Like the PSA Groupe, other manufacturers are pulling up their socks with regards to the Indian market. Volkswagen Group, Kia Motors and MG Motors have already announced investments of more than Rs 15,000 crore in product and market expansion over the next few years. Homegrown heavyweights like Maruti Suzuki, Hyundai and Tata Motors too are leaving no stones unturned to woo the future customers.
The Renault-Nissan combine had to repeatedly push forward their market share target of five percent in India due to intense competition from rivals. The Franco-Japanese association is still struggling with its target also resulting in a failed attempt to push the formerly defunct brand Datsun into the market without much success.
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