French car major, PSA Peugeot Citroën, which will be now referred to as Groupe PSA, is set to make its comeback to India. And this time around it's a more sustainable approach, as the entry is part of the company's aggressive 'Push to Pass' growth plan for the period 2016-2021.
The plan, announced by Carlos Tavares, chairman, Groupe PSA, includes a partnership deal in India by 2018 and a product launch before the end of 2021.
This time frame will ensure that the new generation of the firm’s cars will be launched in India, an earlier launch would mean bringing in cars that would be reaching the end of their life cycle.
On June 10, 2015, our sister publication Autocar Professional had reported 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 stating that the French company was in talks with Tata Motors to re-enter India. In its first innings in India, which ended late 1997, the company had partnered with Premier Automobiles. A second attempt was made independently in 2011, with a plan to set-up a plant with annual production capacity at 1.70 lakh units. Financial woes, however, forced the company to put this plan on the backburner.
In September '14, the French carmaker formed a new 'India-Pacific' business zone comprising 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 manufacturing unit. For the growth plan, it is likely that Peugeot may now tap the India base for both domestic and export markets.
India, expected to become the world's third-largest car market by 2020, could 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". The 'Push to Pass' plan is the first step in this direction.
"Frugal R&D expenditure and rigorous control over production costs as well as fixed costs" is a key base for this new growth plan. India could play an important role in this regard, as seen in case of another French company, Renault and other car majors like Suzuki and Hyundai.
Some of the key objectives of the 'Push to Pass' growth plan are:
- Reach an average 4 percent automotive recurring operating margin in 2016-2018, and target 6 percent by 2021.
- Deliver 10 percent group revenue growth by 2018 vs 2015, and target additional 15 percent by 2021.
- High-quality products and services, basis for the brand's pricing power.
- A product blitz, built on 26 passenger cars and eight light commercial vehicles, including a 1 tonne pick-up truck, leading to the launch of “one new car, per region, per brand and per year”.
- A rich and sharp core-technology strategy, notably shaped by the launch of seven plug-in hybrids and four electric vehicles, and the deployment of the connected and autonomous vehicle programme.
Groupe PSA's 2014-2018 'Back in the Race' roadmap did result in a quick turnaround in its performance. And now the new plan is aimed to "help ensure profitable growth in all the regions where the group operates".