New Order

Dear Readers,

The second largest car manufacturer in Europe is aiming for the top spot in the global automotive order. PSA Group, the French manufacturer that sells cars and motorcycles under the Peugeot, Citroën and DS Automobiles brands, has had a few exceptionally busy months. For a company that was on the verge of crumbling just about four years back, this has been a meteoric rise of sorts. CEO Carlos Tavares, who took charge in March 2014, has been heading this turnaround for the brand that plans to launch one new vehicle per region, per brand, per year 2018 onwards.

In February alone, the group made headlines world over. It is trying to crack the Indian market for the third time, through a couple of joint ventures with the CK Birla group-owned Hindustan Motors. Similarly, the group is re-entering the US market by launching a ride-sharing service starting April 1, 2017.

In Vietnam, PSA has strengthened its partnership with Truong Haï Auto Corporation (THACO) by deciding to start local assembly. It has also been reported that Peugeot has submitted a bid to buy a stake in Proton Holdings Bhd, the Malaysian auto maker. In Europe, it is eyeing acquisition of two brands from the General Motors stable – Opel in Germany and Vauxhall in the United Kingdom – a move that would take PSA much closer to market leaders Volkswagen. It has also announced its entry into the Kenyan market with a deal it signed with the Kenyan government to open a vehicle assembly plant in Nairobi this year.

In what is being seen as a sign of resurgence in the group's fortunes, the PSA Group has also announced it will pay dividends to its shareholders for the first time since 2010.

In the Indian context, the JVs to make cars and engines could mean a win-win for both companies. Powered by its technological knowhow and financial might, the PSA Group would look at gaining from the market knowledge of HM, while for the Indian company, it could mean survival. India's oldest car maker had stopped production of its famed Ambassador car in 2014, leading to the recent sale of the Ambassador trademark and other assets to the French automaker for ' 80 crore. How and what use PSA makes of the iconic badge will play out in the coming years.

As it spreads its wings globally, could PSA potentially lead a new global order in the future? Time will tell.

Deepangshu Dev Sarmah


New Delhi, March 2017