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PSA Groupe to roll out one Citreon model each year in India starting 2021-end

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Dion Global

07 Mar 2019

European auto major PSA Groupe brand Citroen plans to roll out one new model each year in India, starting end of 2021 when it aims to launch its first vehicle in the country, a top company official said.

The company is also looking for around 90 per cent localisation in its products to make them cost efficient and affordable for the Indian market.

"We will launch the first model latest by 2021 end and then every year after that we will have a new vehicle," Citroen CEO Linda Jackson said here in an interaction on the sidelines of 89th edition of Geneva Motor Show.

The company globally follows a strategy of launching only one new car every year in order to get the quality right, she added.

Jackson said the company has developed a programme of international models which it will be introducing across a number of regions, starting India.

When asked about the models, she said,"We are in process of launching electric cars in Europe but we are still offering diesel and petrol. So when we go to India we will be going with which is the most prevalent and then look for trends of the market."

The company is not going to be a leader, but follower in trends in India, Jackson said.

"So, obviously when we come in with diesel and petrol, and if there is requirements for electric it will be launched," she said.

Citroen needs to get high level of local integration to succeed in a cost sensitive country like India, Jackson said.

"That is why with our partner CK Birla we have two JVs and what we want to do is make sure the level of integration of building the cars for Indian customers with Indian suppliers. So talking about the level of integration which is probably around 90 per cent, we need to get highly cost efficient and hence we have factory building gear boxes and engines," she added.

The company is not building vehicles simply for India, but for international markets as well, Jackson said.

PSA Groupe is making sure that it comes with vehicles that are designed for Indian customers with great quality, she said without sharing details about upcoming products.

The company has also started the process for distribution strategy in India, which includes sales and service.

"We know it is a key reason for success and failure in the Indian market," Jackson said.

For the PSA Groupe, the launch of vehicles from Citreon brand will mark its re-entry into the Indian market after a failed venture with Premier Ltd to sell its Peugeot car in the country in the 90s.

Commenting on the reasons for re-entering the Indian market, she said the Citroen brand needs to become more international.

"We are doing this in other regions as well like America, China. In order to become more international you look around the world, look where opportunities are. Clearly we are not in India and look at the size of the Indian market ...the forecast is it is going to grow exponentially," Jackson said.

She further said: "Recognising that it is a very complex market and dominated by very key players, still it is a real opportunity for us and we need to be in India".

Jackson, who is bullish on doing well in India, said,"We are in the heart of the market because we are an affordable brand ...with these values we feel there is a chance to have some great customers in India."

In 2018, the Citroen brand sold 1.05 million vehicles in over 90 markets.

In 2017, PSA Groupe had announced a partnership with CK Birla Group to re-enter the Indian market and earmarked an initial investment of 100 million euros to set up plant for vehicle and powertrain manufacturing in Tamil Nadu.

The tie-up entailed two joint venture agreements between the groups.

PSA Groupe, which sells three brands -- Peugeot, Citroen and DS -- is no stranger to India, having entered into a partnership with the erstwhile Premier Ltd to form a joint venture Peugeot PAL India.

However, it pulled out from the JV in 2001. The group had made repeated attempts to return to the Indian market.

In 2009, it decided to go slow on plans to kick off operations in India due to a global economic slowdown. Later, in 2011, it announced plans to re-enter the Indian market with a mid-sized sedan, ten years after it had exited the country. The plan, however, did not materialise.