Peugeot mulling entry into India again

PSA Peugeot-Citroen has not had a pleasant stay in India. The company's first innings in the country came as joint venture with Premier Automobiles. This collaboration ended in 2001 and Peugeot pulled out of the country altogether. In 2011, the company returned to India and decided to set up a plant at Sanand in the state of Gujarat. However, it called off these plans due to financial troubles at home. Now, according to a report by Financial Express, the French carmaker is once again considering an entry into India.

Peugeot has announced a 'Back in the Race' growth strategy and a Pune-based team has been studying various options for the company's re-entry. There seems to be no chance of the company starting the Gujarat plant. However, a tie-up with General Motors to reduce upfront investments is a possibility.

The American auto major is Peugeot's global partner and has two plants in India - Halol (Gujarat) and Talegaon (Maharashtra). The company is utilising only about 25% of the Talegaon plant's capacity. A tie-up with Peugeot could see better utilisation of the facility's early capacity of 1.7 lakh units. General Motors officials claim that they are not aware of any plans to tie-up with Peugeot.

Peugeot is also looking at the possibility of setting up a plant in either Tamil Nadu or Maharashtra in collaboration with Dongfeng Motors, a Chinese manufacturer that controls 14% stake in PSA.

PSU Peugeot-Citroen is the only global manufacturer not to have presence in India. The strong potential of the Indian market makes it difficult for any manufacturer to ignore. However, considering Peugeot's track record in the country and the current condition of the market, it may not find it easy to make an impact.