PSA Peugeot Citroen re-enters Indian market after 10 years

PSA Peugeot Citroen, Europe's second largest carmaker, is planning to re-enter the Indian market after a 10-year hiatus, a top executive of the company said.

PSA Peugeot Citroen executive V-P(Asia) Gregoire Olivier said India was a key market and the move reflected the company's ambition to emerge as a global player. He added that as in China, the company would offer Indian customers vehicles adapted to their expectations.

The company has announced its intention to enter the Indian market with both commercial and industrial operations and has appointed Rajesh Nellore as the managing director for India operations. He will operate out of Mumbai. The company has also set up an office in Chennai.

The company aims to produce a mid-sized and a compact car, but it did not mention any product plans for the local market. It had earlier decided to go slow on its Indian plans in the wake of the global economic slowdown but has now finalised a greenfield plant in the country to manufacture vehicles locally.

According to industry sources, though the company executives had been scouting for a suitable location in Tamil Nadu and Andhra Pradesh for setting up a facility they could not reach a decision. Earlier, the company had conducted a feasibility study that pointed to the potential of products like the C5 sedan and the C1 compact car in the fast growing Indian market that is to reach 22 lakh units in 2010-11 fiscal.

The Citroen C5 comes in both petrol and diesel engine variants internationally. It will compete with rivals like Honda City, Maruti Sx4, Volkswagen Vento and the Fiat Linea in India. Analysts say the C1 could then follow the C5 to be pitted against popular cars like the Maruti WagonR, Hyundai i10, Chevrolet Beat and the Ford Figo in the compact car segment. The compact car segment covers over 70 per cent of new cars sold in India.