Peugeot and and India brand are joining forces to build and sell cars and components in India.

The PSA Group and the CK Birla Group sign joint-venture agreements to produce and sell vehicles and components in India by 2020

• Indian project in line with PSA strategic plan “Push to Pass” and the growth plan of the CK Birla Group in the automotive sector
• “Be Indian in India”: Long term partnership with an initial investment in capital expenditure close to €100 million (INR 700 cr) for vehicle and powertrain manufacturing in the State of Tamil Nadu
• Bring state of the art technology for an eco-friendly and safe new product range in line with future industry norms and customers’ expectations

The ceremony of signature held today lays the foundation for a long term partnership between the two Groups and represents a key milestone in the development of the PSA Group in India, a cornerstone of its strategic growth plan “Push to Pass”. The CK Birla Group further deepens its capabilities in the auto component and automotive sector in India.

The partnership entails two joint-venture agreements between the PSA Group and the CK Birla Group companies. 

As part of the first agreement, the PSA Group will hold a majority stake in the joint-venture company being set-up with HMFCL for the assembly and distribution of PSA passenger cars in India. 

None of the pictures below should be considered as cars that will or will not be

produced in India in Joint agreement with Peugeot.

As per the second agreement, a 50:50 joint-venture is being set-up between the PSA Group and AVTEC Ltd for manufacture and supply of powertrains. The manufacturing sites for both vehicle assembly and powertrains will be based in the state of Tamil Nadu.

The initial manufacturing capacity will be set at about 100,000 vehicles per year and will be followed by incremental investment to support a progressive ramp-up of the long term project. The manufacturing capacity for powertrains will cater to the domestic market needs and global OEMs. The performance of the industrial set-up will be supported by a significant level of localization, in order to reach the necessary cost competitiveness.

This long term partnership will allow both companies to participate in the growth of the Indian automotive market, which is expected to reach 8 to 10 million cars by 2025⁽¹⁾ from current 3 million in 2016.

Commenting on the agreements, Carlos Tavares, Chairman of the Managing Board of PSA Group said: "Benefitting from the strong support of our Indian partner, the CK Birla Group, and a shared vision, this project is consistent with the strong execution of our Push to Pass strategic plan and represents a major step in PSA Group’s worldwide profitable growth in key automotive markets.”

Speaking to the press in Paris on this momentous occasion, Mr. CK Birla, Chairman, the CK Birla Group, said “We have embraced ‘Make in India for India and the World’ for several decades and are among the early adopters of frugal manufacturing in the country. I am confident that the coming together of the latest state-of-the-art technology from the PSA Group and the engineering and manufacturing excellence of the CK Birla Group will benefit the automotive sector in India.”

Production of an All-New new Citroën vehicle will be produced at the Rennes Production facility in France.

• Production of the new Citroën vehicle was initially set to be assigned to a plant outside Europe
• Final decision made possible by stakeholders commitment to work together to secure the plant's future
• €100 million to be invested to increase output in Rennes by 60% by 2018

As part of the product offensive included in the ‘Push to Pass’ plan, which includes 34 new models, the Rennes plant will start manufacturing a new market-winning vehicle for Citroën by 2018. The ‘C84’ project is part of a dynamic product strategy that will see four new models launched by the brand in less than 18 months.

Pictures used for illustrative purposes only and are not to be confused 

with the actual production models from 2018.

Based on the EMP2 platform, the new Crossover will be manufactured alongside the future Peugeot 5008 and the Citroën E-Mehari.

With these three models, output at the plant will ultimately reach 100,000 vehicles per year compared with 60,000 currently.

The Rennes plant was chosen after a study carried out by the PSA Group over several months, reflecting the performance measures taken by the plant and the commitments made to upgrade operations.

The plant upgrade plan puts forward several ground-breaking solutions, with the introduction of modern, agile manufacturing processes. Work will begin in early 2017 and is scheduled to be completed in 2018. The upgrade represents a €100 million investment, which will also benefit other automotive industry players in Brittany.

The decision to manufacture the new vehicle in Rennes was made possible by the commitment of the entire workforce and the shared drive by management and the signatory trade unions to come together to secure the plant's future.

On 29 April, an agreement called the "Contract for the Future of Rennes" was signed at the plant, with the support of five of the Group’s six trade unions (CFDT, CFE/CGC, CFTC, FO and SIA/GSEA), representing more than 80% of employees. The decision to manufacture the new vehicle in Rennes was subject to this agreement, which will come into force on 1 January 2017.

Commenting on the announcement, Carlos Tavares, Chairman of the Managing Board of the PSA Group, said: "The decision to manufacture this new vehicle in Rennes shows that, when stakeholders are committed to working together to secure the future of a manufacturing plant, they can create the performance conditions necessary in a continuous efficiency improvement process."