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BW Businessworld

Peugeot To Bring In Swift, Dzire And Brezza Challengers For Indian Market

“There are three products lined up by PSA Peugeot Citroen comprising a hatchback, a compact sedan and a compact SUV and are codenamed SC1, SC2, and SC3 respectively," sources

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Peugeot, a French car manufacturer and part of Groupe PSA, is developing models that will be pitted against market leader Maruti Suzuki’s Swift superhatch, Vitara Brezza compact SUV and Dzire compact sedan segments. Designed and developed at its principal R&D centres in France, all the three products will be unveiled around the 2020 Auto Expo. Although the details remain sketchy, it has been learnt from reliable sources these models will be priced very competitively with a localization reaching beyond 80-85%. It is widely believed (though not officially confirmed) the upcoming products will be based on the PSA PF1 platform, which is a global subcompact platform used by the Paris-headquartered firm.

According to a well-informed source, “There are three products lined up by PSA Peugeot Citroen comprising a hatchback, a compact sedan and a compact SUV and are codenamed SC1, SC2 and SC3 respectively.  Based on the same platform, these three products are expected to premiere in the Indian market and will eventually be exported to many ASEAN and African countries in the subsequent phase. In all probability, they will be sold under the Peugeot brand for India.”

In an emailed reply to BW Businessworld, Pierre-Olivier Salmon, Head of Corporate Information, Communications Division, PSA Peugeot Citroen said, “In consistency with the deployment of our push to pass strategic plan and our core model strategy, our priority will be to produce and sell a range of cars which will meet the expectations of Indian customers with state-of-the-art technologies. They will be modern and attractive though affordable as India is a very tough market with highly demanding customers. Again, all details will be provided in due time. At this stage, we are not detailing our product plan for obvious confidentiality reasons.”

PSA Group, which is set to begin its second innings in the Indian market, has inked two joint ventures with CK Birla Group with an initial investment of Rs 700 crore. While the first one will be into assembly and distribution of PSA passenger cars in India, the second agreement is a 50:50 joint-venture between PSA and AVTEC and will be making powertrains for the French carmaker’s domestic and worldwide operations. The manufacturing sites for both vehicle assembly and powertrains will be based out of Chennai, Tamil Nadu. The initial manufacturing capacity will be set at about 100,000 vehicles per year and may be expanded subject to market conditions.

The Economic Times in its recent report has claimed that PSA Group’s Chief of Global Sourcing as well as from the senior management will be in Chennai to hold talks with 50 tier-1 auto component players, including Motherson Sumi, UNO Minda, Spark Minda, Rane Group, in order to decide on the start of the production and sourcing process. The report, citing anonymous sources, has also maintained that the French carmaker is looking to make India the export hub for emerging markets and is putting a request for quotation (RFQ) to the component suppliers for more than four lakh cars. Of these, one lakh will be manufactured at the Chennai plant, which the company bought from Hindustan Motors. Components for three lakh cars will be exported to Brazil and South Africa, as mentioned in that report by the aforementioned business daily.

Puneet Gupta, Associate Director at IHS Markit, a sales forecast and market research firm, said, “India will be the third biggest PV market by 2020 and will be very important for PSA. Being a European brand, it will enjoy a brand equity vis-à-vis other brands. Ergo, their products can command a premium positioning vis-à-vis models sold by mass market players such as Maruti or Hyundai. The company is expected to make it a bit more difficult for Renault, VW, and Tata Motors. However, it has to come up with the latest technology in their products which could differentiate them from other brands.”

It may be recalled that PSA Group entered India way back in the early 90s in association with Mumbai-based Premier Automobiles and sold around 10,000 units of Peugeot 309 within the first year of establishment. However, labour unrest and mounting losses forced Peugeot to abruptly exit the joint venture and eventually move out of India by 1997.  One and a half decades later, it made another attempt and laid the foundation for a mega facility at Gujarat’s Sanand facility in anticipation of producing 170,000 units per annum. But even this plan was jettisoned as the French auto giant was facing a severe financial crisis at the global level (in Europe). Hence, this would be practically the group’s third attempt to crack the world’s second fastest growing passenger vehicle market.