Official: Peugeot To Return To India - Third Time Lucky?

In its third attempt to make room for itself in one of the fastest growing automobile markets in the world, the PSA Group has entered into a partnership with the CK Birla group. 

The groups have entered into two joint venture agreements. As per the first agreement, the PSA Group holds a majority stake in the venture set up with Hindustan Motors for production and distribution of PSA vehicles. The manufacturing plant will be located in Tamil Nadu, with an initial manufacturing capacity of one lakh vehicles per year. Committed to "Make In India", the groups ensured of "incremental investment to support a progressive ramp-up of the long-term project". 

The second agreement is a 50:50 JV set up between the PSA Group and AVTEC Ltd for manufacturing and supply of powertrains. This factory will be located in Tamil Nadu as well,  and will be used to "cater to the domestic market needs and global OEMs". Notably, AVTEC already produces petrol and diesel engines that power Peugeot / Citroen cars globally. 

But, all hasn't been that simple for Peugeot...

The year is 2012. Pragati Maidan is swarming with auto enthusiasts, and you see journalists jostling for space, as they go about documenting every single pavilion in the arena. The big guns - read: Hyundai, Maruti and Honda - get their due rather quickly. But, the pavilion parked opposite Honda piques the interest of many. The brand name is rather familiar, the brand insignia, even more so. Peugeot has decided it wants to have a second go at the booming Indian auto space. 

Peugeot put a range of cars on display. The big 508 saloon, the quirky 3008 crossover and the sporty RCZ coupe - all made their big Indian debut. The French brand could've cemented itself in our market back then. But, as luck would have it, the Eurozone saw itself engulfed in a deep financial crisis. The recession meant Peugeot had to put its plan of setting up manufacturing units in India on hold. To find a way round, the brand tried piggybacking on their global alliance partner - General Motors for production and sales. Sadly, that fizzled out soon after as well. 

The first fail

Peugeot didn't set off on the right foot in India, to begin with. Post liberalisation, it was indeed among the first international car brands to make a dash to Indian shores in 1994. With them, it brought along the likeable 309 sedan. Meant to take on the likes of the Maruti Esteem and the Daewoo Cielo, the Peugeot offered a hint of exclusivity back then. Constant strikes at the Premier Auto (their erstwhile partners) and a sub-par sales experience saw sales plummet beyond repair. Quick to cut losses, the brand wound up operations by 1997. Word has it, a few buyers who booked the 309 are yet to get a refund.

The way forward

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At this moment, it isn't clear as to what cars the PSA Group is planning on retailing in India. In fact, it is too early to say. The group has quite a few good cars under the Peugeot, Citroen and DS brands which we think could help it get a foothold in our markets. The diverse portfolio has everything from the big and brawny Peugeot 5008 SUV, to the super hot Citoen DS3 racing. Bring out the lucky charms, PSA!