Peugeot, the famous French car maker, has signed a joint venture deal with the CK Birla Group, as part of its plans to re-enter the Indian market in the next two years. Under this deal, Peugeot will be given permission to use CK Birla Group’s manufacturing plant near Chennai. If everything reaches conclusion without any major issues, Peugeot is expected to launch its range of cars in India by the end of 2018.
Before talking about further details of the deal, let us first give you an insight about the CK Birla Group. This Noida-based conglomerate is basically the owner of Hindustan Motors, the company that produced the iconic Ambassador. Since the Hindustan Ambassador has now been discontinued, all manufacturing facilities of the firm are currently lying unused.
This is an opportunity that Peugeot is planning to pounce on. As a result, Peugeot has acquired permission to use the CK Birla Group’s plant in Chennai to locally manufacture and produce Peugeot cars in India. It must be noted that Peugeot is a budget car maker, and hence it is extremely important for the company to produce cars locally in order to offer them at a reasonable price tag. If the cars are imported as CBU/CKD units, the resulting price will be a bit too exorbitant for the market to consider a completely new brand.
The plant in question in this deal was earlier used to manufacture the Mitsubishi Lancer, a true icon in itself. However, since the Lancer has now been discontinued as well, and Mitsubishi no longer develops cars locally, Hindustan Motors has happily given the plant’s control to Peugeot. In its current state, the Chennai manufacturing facility has an annual production capacity of 12,000 units. However, if the French automotive manufacturer decides to enter India through a single factory, it will likely expand this capacity as per requirement.
It is interesting to note that Peugeot had earlier entered the Indian market under a partnership with Premier Automotive Limited, manufacturers of the Premier Padmini – a car that has been the biggest and most potent competitor of the Ambassador. Though the Peugeot-Premier partnership didn’t work out as per plans, we wish Peugeot all the best for its second innings in the country. Hope they bring in some of their beautiful offerings to India, including the Peugeot 308 and 5008.
Update on February 12, 2017: Hindustan Motors has also sold the iconic Ambassador brand name to Peugeot. Check full details here.