Peugeot Citroen to re-enter India with a mid-sized sedan

Europe's second largest car-maker PSA Peugeot Citroen on Wednesday announced plans to re-enter the Indian market with a mid-sized sedan, ten years after it made an exit from the country.

The French company, which in 2009 decided to go slow on plans to kick off operations in India due to a global economic slowdown, will set up a plant to manufacture the vehicle locally. The location for the facility is still being evaluated.

"Peugeot is pleased to announce its intention to enter the Indian market with both commercial and industrial operations. The brand will produce, as a first step, a mid-sized sedan car," the company said in a statement.

Without sharing any timeframe for introducing the product in the country, the company said its objective is to sell 50 per cent of its total vehicles outside Europe by 2015, compared to 39 per cent in 2010.

"India is a key market and this new implantation reflects our ambition to become a global player. As in China, we will offer Indian customers vehicles adapted to their expectations," PSA Peugeot Citroen Executive Vice-President (Asia) Gregoire Olivier said.

Without specifying if the company's Indian headquarters has been shifted to Mumbai, the company said: "Rajesh Nellore, Managing Director India, is leading the Group's activities in India from Mumbai."

In 2008, PSA Peugeot Citroen had appointed Nellore as Vice-President in charge of the projects for India and had set up an office in Chennai.

PSA Peugeot Citroen is no stranger to India, having entered into a partnership with the erstwhile Premier family resulting in joint venture Peugeot PAL India. However, it pulled out from the JV in 2001.

The company had earlier conducted a feasibility study and said that a decision to enter the burgeoning Indian passenger car market, which is expected to reach near two million units in 2010-11, would be taken in 2009.

Before that, in 2009, Peugeot Citroen was scouting for a location in Tamil Nadu and Andhra Pradesh, for which it had met government officials in the two states to set up a manufacturing facility.

The company was reportedly in discussions with the Automotive Research Association of India to understand the regulations and homologation (making the vehicles meet Indian rules and norms) needs for launching products like its 307 hatchback and C5 sedan in the country.

Later, Nellore said the global economic crisis slowed down the company's plans, but was strongly in favour of operations in India "as and when conditions become favourable".