Soon after announcing its India comeback in 2011, setting up an office in Mumbai and identifying land for a plant in Gujarat, Peugeot put its India comeback plans on hold due to a severe financial crunch the company was going through.
However, the French carmaker is now re-looking at the Indian market, which is poised to become the third largest in the world by 2020. Peugeot chief executive Carlos Tavares confirmed the company’s India plans, "Yes, we are seriously looking at coming back. In fact, I can tell you we will come back to India in the next two or three years. Right now it is only a matter of finding the right partner."
Peugeot’s return to India hinges on identifying a partner to share the large investment of an estimated US$ 600 million (Rs 4,000 crores) for setting up a fully integrated manufacturing and engine plant. The bigger challenge is developing products for the Indian market, another reason why Peugeot is keen to share a platform with another manufacturer. This would give higher economies of scale and reduce costs.
Peugeot is believed to have been in talks with Tata Motors to share the Indian automaker’s X4 platform, which will underpin future Tata models. The X4 platform could be an ideal base for Peugeot to develop its own model line for India and other emerging markets. However, talks between the two companies for a possible partnership have been suspended.
This leaves very few options for Peugeot which may eventually have to enter India on its own if it wants a piece of what is forecast to be a five million car market by 2020.
Peugeot pulled out of the Indian market in 1997 after it’s sole model, the rugged but outdated Peugeot 309 struggled to find buyers. Now, nearly two decades on, Peugeot is struggling to re-enter India.