French car manufacturer Citroen, a part of Groupe PSA, will enter India by 2021.
Following its ‘Push to Pass’ strategy, Groupe PSA had announced in 2017 that it will enter the Indian market. The strategy will involve one of the company’s three brands (Peugeot, Citroen and DS) to be launched and produced in India, with significant localisation.
Carlos Tavares, Chairman of the Managing board, has confirmed that the group will introduce the Citroen brand in the Indian market – the first launch is expected before the end of 2021 following the launch of production of powertrains.
Groupe PSA and the CK Birla Group have signed two long-term partnership agreements to manufacture vehicles and powertrains locally in the state of Tamil Nadu, India. The first agreement allows Groupe PSA to hold a majority stake in the joint venture with Hindustan Motors Financial Corporation Limited (HMFCL) for assembly and distribution of their vehicles in India. The second agreement involves a 50/50 JV between Groupe PSA and the AVTEC ltd. (also part of the CK Birla Group) to manufacture and supply powertrains.
In 2017, Groupe PSA announced an initial investment of Rs 700 crore towards a manufacturing facility with an annual capacity to manufacture 1,00,000 units. Additional investment at later stages is contingent on the growth in the long term.
Additionally, the group also acquired the ‘Ambassador’ car brand name from the CK Birla Group for Rs 80 crore in 2017. The Hindustan Ambassador was India's first mass-produced vehicle, and to date, it holds the record of being the longest produced car in the world (1958-2014).
Groupe PSA is the largest car manufacturer in France that produces 3.6 million vehicles annually under the three brands. In an interview with Executive VP, India & Pacific, PSA Group in 2017, Emmanuel Delay stated that their offering will consist of a product that will ‘look like an SUV’.
Delay also mentioned during the interview that ‘there will be a number of vehicles that will suit the market. This doesn’t mean that they will be unique and specific to India, but they will be a good fit for the market.’
With the Citroen brand being confirmed for India, the brand’s range of products mostly consists of crossovers and SUVs. It seems unlikely that Citroen will design a brand-new market-specific product, instead, it will have their existing models adapted to fit the needs of the Indian market. Citroen’s current product lineup includes the C1 hatchback and C3 crossover, both of which are under 4 metres in length. The range also includes the C3 Aircross, C4 Cactus and C5 Aircross SUV. Additionally, their 7-seater MPV range consists of the Grand C4 Space Tourer, which is slightly generous in length than the Mahindra Marazzo but shorter in length compared to the Toyota Innova.
As for the Ambassador name, Delay stated that ‘the name Ambassador could be part of this journey… But we’re not worried about the name Ambassador having different connotations in the market, and we will decide in future how we can leverage the name.’
‘We are very proud to launch Citroën in India, one of the fastest growing markets in the world. Building on the Brand's success in Europe with 5 consecutive years of growth, I am convinced that Citroën’s selling proposition of unique styling, eco-friendly & comfortable cars at the heart of the market has all the potential to satisfy Indian customers,’ said Linda Jackson, Citroën Chief Executive Officer.
‘Announcement of Citroën brand for our Vehicle JV in India, soon after the inauguration of the Powertrain JV greenfield facility at Hosur in late 2018, is a major milestone for the long-term partnership of Groupe PSA & the CK Birla Group. It is truly an exciting brand for the Indian consumers seeking international eco-friendly products designed for & made in India with unique styling & comfort,’ said C.K. Birla, Chairman CK Birla Group of Companies.
In November 2017, Groupe PSA and the CK Birla Group inaugurated the construction of their brand-new engine manufacturing plant in Hosur, Tamil Nadu. Further confirmation of the brand’s product offering for the Indian market will be released at a later stage along with specifications of the engines that will be manufactured by AVTEC at the engine manufacturing plant in Hosur.