PSA Group Enters into Indian Market through JV with CK Birla Group

The PSA group has signed a joint venture agreement with the renowned Indian industrial group, CK Birla Group to extend its reach in the Indian auto market and enhance its vehicle production capabilities.

Terming its new growth initiative, “Be Indian in India”, the company will be investing Euro 100 million initially for setting up two factories in the state of Tamil Nadu. These two factories will engage in the production of vehicles and powertrains from 2020.

The strategic partnership essentially includes two JVs, one in which PSA Group will have a majority stake in a company that it will set up along with Hindustan Motors Finance for the assembly and distribution of PSA passenger cars in India. The second agreement involves collaboration with between PSA Group and AVTEC, a manufacturer of transmission and powertrain components.

Initially, the factories will turn out 100,000 cars on an annual basis with capacity being gradually ramped up to meet demand. The powertrain-manufacturing facility will cater to the needs of both the domestic market and global OEMs.

The Indian automotive market is growing at a fast pace and the demand for new vehicles is expected to increase from 3 million vehicles in 2016 to about 8 million-10 million cars by 2025. With this new initiative, the PSA Group will be strengthening its position in this market which offers the company immense potential.

Speaking about the JVs, Carlos Tavares, chairman of PSA Group’s managing board, said that with the support of the company’s Indian partner, the CK Birla Group, and a shared vision, the new project is consistent with the company’s strong drive to execute its Push to Pass strategic plan. It represents a major advance in the PSA Group’s worldwide profitable growth in key automotive markets.