Peugeot to return to India with Birla Group manufacturing deal

PSA Group is coming back to India by 2020, the French automaker stated on Wednesday after revealing a modest production investment with CK Birla Group, the New Delhi-based corporation.

PSA, maker of Peugeot, Citroen and DS automobiles, stated it will construct automobiles in Tamil Nadu under a preliminary 100 million-euro ($107 million) joint venture investment with Birla-owned HMFCL, with a yearly production capacity of 100,000 automobiles.

A second deal with AVTEC will develop engines and transmissions for PSA and potentially for other makers, the groups stated in a joint statement. AVTEC is another CK Birla company,

The deals represent a “significant step in PSA Group’s global profitable growth”, Chief Executive Carlos Tavares stated. The mid-sized French maker is pressing a global expansion to decrease its dependence on European sales.

India’s fast-growing market, which broadened 7 percent to 2.96 million cars in 2016, has shown tough to split for lots of foreign automakers. The Peugeot brand was last seen in the late 1990s, when a former joint venture collapsed.

Suzuki’s inexpensive Maruti brand dominates in India with a 47 percent market share, however PSA’s domestic competing Renault has made inroads recently with the penny-wise Duster SUV and its smaller Kwid sibling.

PSA struck its collaboration with the CK Birla Group, with sales of around $1.6 billion, after talks with other potential partners. As per local press reports, those consisted of Jaguar Land Rover parent Tata Motors along with former Renault ally Mahindra & Mahindra.