CK Birla Group has signed a joint venture with the French multinational manufacturer of automobiles and motorcycles company PSA to assemble and distribute PSA (Peugeot) passenger cars in India; while the agreement with AVTEC (a subsidiary of CK Birla Group) and PSA will generate powertrains for Indian players.
The company has said that this long term project will start with an initial manufacturing capacity of about 1,00,000 vehicles per year which will be ramped-up with an incremental investment; whereas the powertrains will be supplied to domestic players supported by substantial localisation.
Commenting on the agreement, Carlos Tavares, Chairman of the Managing Board of PSA Group said: “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.”
The long term partnership will allow both companies to participate in the growth of the Indian automotive market, which is expected to reach to 8-10 million cars by 2025 from the current figure, which hovers at over 3 million in 2016.
The French carmaker started its first innings in India way back in 1994 by partnering with PAL (Premier Automobiles Limited). Peugeot 309 was the first car to be launched in the country as a CKD, after it was discontinued in the European market. The 309 was lauded for its refined diesel engine and sorted driving dynamics (typical of European cars) but failed to garner sales. The current Peugeot and Citroen line-up includes brilliant hatchbacks and we surely hope to see them plying on our roads by 2020.