The French car maker will make and sell vehicles and parts in India for the first time in 23 years in a partnership with CK Birla Group
Doug Revolta Autocar
25 January 2017

Peugeot will return to India by 2020 in a joint venture with Indian conglomerate CK Birla Group, the PSA Group has announced.

The French car maker has signed an agreement to produce and sell vehicles and components in the country following a 23-year absence from the Indian market.

Peugeot originally announced a comeback in India in 2011, but financial struggles meant the plan was terminated.

As part of the new agreement PSA Group will be the majority stakeholder in the joint-venture with Hindustan Motors Finance Corporation Ltd, which was acquired by CK Birla Group in 2014.

The other part of the agreement will see a joint venture – with a 50% share – created between PSA Group and AVTEC Ltd (also owned by CK Birla Group) for the manufacturing and supply of powertrains.

It's expected that PSA Group will invest around £80 million in vehicle and powertrain manufacturing at a plant in the south-eastern state of Tamil Nadu, and aims to build around 10,000 vehicles a year. 

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The move follows PSA Group’s 'Push to Pass' growth plan, according to chariman of PSA Group, Carlos Tavares.

"Benefitting from the strong support of our Indian partner, the CK Birla Group, and a shared vision, this project is consistent with the strong execution of our 'Push to Pass' strategic plan and represents a major step in PSA Group's worldwide profitable growth in key automotive markets,” Tavares said.

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26 January 2017
An £80m investment will not get them far. The Indian market is a brutal one, and you can't do things by halves there. PSA will have to invest in developing a local supply chain, as well as having products that will be suitable for the local market.

Renault made that investment, and is reaping the rewards. Must be quite galling for the PSA group to watch Renault continue to do well in India, whilst PSA continued to be absent from one of the worlds fastest growing car markets.

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