After a failed attempt of re-entering India a few years ago owing to the European crisis, French auto group PSA Peugeot Citroen is getting ready to take another shot at the country, this time with a prominent local partner. Economic Times reports that the firm, which is now in a better financial health after the French-Chinese bailout, is in talks with Tata Motors for a possible partnership which may involve manufacturing, distribution and even technology sharing.
PSA Peugeot Citroen top officials have always maintained that India is an important market for the brand and hence a business entity called ‘India-pacific Operations’ have been formed within the company. However, the automaker has not given a tentative timeline for its re-entry.
According to the publication, Emmanuel Delay, head of India Pacific Operation at the PSA, is spearheading the discussions with Tata Motors to drive home a favorable deal. The initial information indicates that Peugeot may make use of Tata Motors’ heavily underutilized Sanand manufacturing facility to make 208 hatchback, 308 sedan and 2008 crossover. The cars will then be distributed through the Indian automaker’s established network. The deal could be similar to the one Tata Motors made with Fiat in 2007.
It is also reported that, the discussions also included possibilities of engine and platform sharing with Tata Motors. PSA Peugeot Citroen’s tech-laden world-class platforms could help the local player to come up with products that are of international quality.
If the Peugeot-Tata Motors deal attains fruition, the French automaker will be able to save big on capital investment in India as well as on time required to set up its own manufacturing and distributing operations. For Tata Motors, the deal could offer access to its partner’s platforms and increase the utilization level of its Sanand plant.
It’s to be noted that PSA Peugeot Citroen also held talks with Mahindra, GM India and HM but Tata Motors has emerged as the preferred firm for a potential partnership.
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