PSA has been testing the market for many months now and began taking tentative steps towards making India a global component sourcing base only recently.
NEW DELHI: French carmaker PSA Peugeot Citroen has finally taken the plunge in India.
PSA has been testing the market for many months now and began taking tentative steps towards making India a global component sourcing base only recently.
But now, it has decided to set up a full-fledged India office and appointed a vice-president for India — Rajesh Nellore. Nellore comes from Johnson Controls and joined PSA in Paris only last month where he was being trained for the new role.
Speaking to DNA Money, he said his brief is to set up “a complete integrated chain of manufacturing and sourcing in India”.
Though he wouldn’t divulge either the timeframe or the investment earmarked for these goals, Nellore said the French car maker believes in joint ventures and could well take the same route in India.
There have been reports of PSA scouting for a contract manufacturing alliance or a partner for assembly operations in India.
In Russia, for example, PSA works in a venture with Mitsubishi. Nellore also made it clear that if it makes economic sense, “there could be big investments coming India’s way”. PSA’s interest in India comes on the back of an unsuccessful stint in the mid-nineties when it partnered Premier Automobiles, and this may explain its rather cautious approach this time around. Industry sources have said in the past that PSA has spoken to many Indian biggies for a possible manufacturing and marketing tie-up but things somehow did not work out to their satisfaction.
But now that almost every big global car maker is looking towards India, PSA —-Europe’s second largest vehicle maker after Volkswagen —- cannot afford to ignore the market. After the merger between PSA Peugeot and Citroen last year, the company operates both brands within and outside Europe in passenger car and light commercial vehicle segments.
Chrysler, another brand which has been keen to come here, is also believed to be thinking in terms of separate manufacturing and marketingdistribution alliances for this country.
Speaking to DNA Money earlier, the purchasing vice president of PSA, Jean-Christophe Quemard, had said that Magna Steyr has been appointed as PSA’s agent in India to help develop this country as a major component sourcing base.
Going forward, this relationship may well be converted into a joint venture. Quemard said PSA is targeting sourcing of machine parts to the tune of €200 million (about Rs 1200 crore) within the next two years.
Already, several well known suppliers such as Amtek Auto, Asahi Glass, Avtec, Minda Industries and Delphi-TVS have made presentations before the French major to bag component sourcing contracts.
b_sindhu@dnaindia.net
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