The PSA group would be more comfortable about opting for the Citroen range first so that there are no “uncomfortable recall issues associated with brand Peugeot.”
Murali Gopalan
Mumbai, June 24 PSA Peugeot-Citroen is expected to take a call on entering the Indian market by end-September this year, say top industry sources.
“Indications are that Peugeot will go ahead with the India plan but tread cautiously. Numbers will be modest to begin with and could be ramped up gradually depending on market acceptance of the products on offer,” they added. Cars could begin rolling out by end-2011 if things go according to schedule.
The French company was, ironically, among the earlier entrants to India way back in 1993-94 with its 309 model.
However, it was bogged down by a series of constraints starting with a labour strife at its Kalyan plant (near Mumbai), shortage of CKD (completely knocked down) kits, a liquidity crunch and finally a legal spat with its local partner which had to be resolved in court. Peugeot won the case but then stunned industry circles by deciding to call it quits in November 1997. It was a move that left a bitter taste in everyone’s mouth right from financiers and dealers to suppliers and customers since dues had not been squared with most of them.
Sources say that it is this legacy that haunts Peugeot even today which makes it “doubly apprehensive” about India. It is possibly for this reason, they add, that the PSA group would be more comfortable about opting for the Citroen range first so that there are no “uncomfortable recall issues associated with brand Peugeot”.
What is clear though is that the new CEO of Peugeot-Citroen, Mr Philippe Varin, is clear that the company will have to think more globally especially, for business opportunities in the BRIC (Brazil, Russia, India and China) economies. Peugeot is still perceived as being far too Europe-centric with little idea of the world beyond.
Reports have also been doing the rounds that the company has zeroed in on Tamil Nadu and Andhra Pradesh for its potential second innings. “The lockout at the Kalyan facility still rankles because it was the beginning of a series of woes in India way back in 1996. Peugeot would be more comfortable in the South where the work ethic is different,” sources said.
The company already has a sourcing office in Chennai which could tilt the scales in favour of Tamil Nadu. The State also has a strong component base, critical from the viewpoint of localisation. However, Andhra Pradesh will also pitch aggressively. There were near misses earlier in the form of Volkswagen and Proton. This time around, the Government will pull out all stops to offer the best incentive package.
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