Europe’s second largest car makers, the PSA Peugeot Citroen alliance is planning a return to the Indian market after a long absence of 11 years. The Indian automobile Industry has changed a lot since then and PSA have taken a wise move that could see a good range of small cars from Peugeot make it to India in a couple of years. The model presently under consideration is a 207 based hatchback that is specially engineered for emerging markets and will be produced in Turkey to cater to the European market.

While PSA were contemplating making a full fledged return, they are expected to take a smart move by signing a JV with Caparo India, a wholly owned subsidiary of UK-based Caparo Group. Caparo’s experience in supplying body panels for the Tata Nano and its huge reserves of land will be the immediate advantages of this JV. PSA initially plan a manufacturing capacity of 6000 units pa with an initial investment of Rs 1,500 crore.

Sources close to the Industry say that the finer points of the deal are under negotiations and the two companies in question will meet in the enxt fortnight to finalise the deal. When contacted, Caparo India MD Uttam Bose declined to comment. Peugeot is expected to be a mass-market brand with its array of small cars while Citroen is expected to be an upmarket brand. PSA plans to roll out a mix if small hatchbacks and mid-size sedans from 2012 covering the price bracket from Rs 5-10 lakhs. PSA have been eyeing the Indian market for quite sometime now and even visited the state of Andhra Pradesh in the intention of setting up a greenfield plant. Some rumours say that they even eyed Tamilnadu for its rich diversity in Automobiles.

Caparo India, an Indian business arm of UK-based Caparo Group, offers complete lifecycle solutions for automotive systems, assemblies, advanced composites, modules and components. It has for long shown interest in vehicle manufacturing. They even made the ultra-fast Caparo T1 supercar.

“We are currently assessing the opportunities offered by the India market and the way to enter this market, but we have not taken any decision yet,” Laurent Cicolella told Reuters by telephone from France. “The points…mentioned, are part of the assessment,” Cicolella said in reply to e-mail queries. Cicolella also said that there were no “discussions ongoing” with the Caparo Group.

The compact car segment, with a share of 70 percent of the total passenger vehicle market in India and PSA would want a piece of that pie. Even Ford will launch its much lauded Figo next year followed by the Polo, Micra, Beat and many more. Peugeot will bring a 207 based car and we are quite sure that Peugeot’s looks wll be enjoyed by Indians

Peter Haynes of JATO Dynamics, which provides data on vehicles worldwide told that “I think Peugeot, like any other automobile company, is looking at big developing markets like China and India for growth,”

Going by the recent developments, India could be come the biggest small car market in the world by 2012. Stay tuned to wOs. We will bring you all the news.

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