PSA Group and CK Birla Group have signed the joint venture agreement to produce and sell vehicles and engines in India by 2020.
As a part of the PSA Group’s “Push to Pass” strategy, the PSA group have confirmed that they will re-enter the Indian market by the year 2020. The PSA Peugeot-Citreon has signed two long-term partnership agreement with the CK Birla group to produce vehicles and powertrains in India.
The first agreement is where the PSA Group will hold a majority stake in the joint venture with Hindustan Motors Financial Corporation Limited (HMFCL) for the assembly and distribution of PSA passenger cars in India. The CK Birla Group acquired the operations of HMFCL in 2014. The second agreement is a 50/50 joint venture between the PSA Group and AVTEC Ltd. (part of the CK Birla Group) to manufacture and supply powertrains.
An initial investment of €100 million (Rs. 700 crore) in the state of Tamil Nadu will be made by the PSA Group towards an annual manufacturing capacity of 100,000 vehicles. Additional investment will be made as the project sees growth in the long term. In addition to that, PSA has confirmed that to deliver products at a competitive price, high form of localisation of the products will be made.
The PSA Group which has the Peugeot, Citroen and DS brands under its umbrella, is the largest manufacturer in France who produce around 3.14 million vehicles a year globally.