After exiting the Indian market in 1997, French auto major PSA Peugeot Citroen is eyeing a comeback, with the company planning to set a factory in Andhra Pradesh .jpg) If reports are to be believed, competition in the Indian automobile market is set to intensify further as French auto major PSA Peugeot Citroen, is eyeing to foray into the auto sector of the country yet again. It is to be noted that Peugeot exited from the Indian market way back in 1997 after incurring heavy loses and its partner in the country, Premier Automobile, joining hands with Fiat. The company, which is planning to invest around €700 million for setting up a factory in the Andhra Pradesh (AP) equipped to roll out nearly one lakh cars per annum, is studying opportunities present in the auto sector of the country.
Lucrative automotive market in the country
According to Manindar Singh, managing director of Pabla Bearings Limited, a mid-sized manufacturer of automotive ball bearings in Ludhiana, “The dynamics of the Indian auto industry has undergone a tremendous metamorphosis in the last decade. The purchasing power of Indian consumers has increased significantly and the market size has expanded to a great extent. Demand for vehicles has surpassed supply and with India poised to become one of the major auto hubs in the world, the booming Indian automobile market is enticing enough for Peugeot to venture again.”
Several auto makers such as Volkswagen, Tata Motors etc have earmarked massive investments in the next few years to expand their existing capacity, forecasting demand to rise further in the country.
Shyam Charmanna, proprietor of Moto Axis, a mid-sized automotive parts dealer in Hyderabad, opines, “Coming of the French auto major augurs well for domestic auto parts vendors operating within AP as the same will provide a fillip to their business. The company needs to have a strong local vendor base for procuring auto parts.” Meanwhile, Peugeot is in talks with several French banks to raise the required capital for the project.
Arup Choudhury |
