PSA Joins Hands With CK Birla Group to Re-Enter India
The tie-up entails two joint-venture agreements between the companies of the two groups.
Peugeot 308R Hybrid, for representational purpose. (Photo Coirtesy: Peugeot)
European auto major PSA Group today announced a partnership with the CK Birla group to re-enter the Indian market and earmarked an initial investment of 100 million euros (around Rs 700 crore) to set up vehicle and powertrain manufacturing in Tamil Nadu. The tie-up entails two joint-venture agreements between the companies of the two groups.
"As part of the first agreement, the PSA Group will hold a majority stake in the joint-venture company being set-up with HMFCL (Hindustan Motor Finance Corporation Ltd) for the assembly and distribution of PSA passenger cars in India," the two firms said in a joint statement.
Under a 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," it added.
The long-term partnership entails an initial investment in capital expenditure close to 100 million (Rs 700 crore) for vehicle and powertrain manufacturing in Tamil Nadu, the statement said. The initial manufacturing capacity will be set at about 1,00,000 vehicles per year and will be followed by incremental investment to support a progressive ramp-up of the long term project, it added. 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 localisation, in order to reach the necessary cost competitiveness, it added. PSA Group Chairman Carlos Tavares said: "Benefiting 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."
CK Birla Group Chairman CK Birla said: "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." 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 from current 3 million in 2016, the statement said.
Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.
Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months. Use code FREEDOM.
Recommended For You
- Neha Dhupia, Angad Bedi Are Slaying it By the Beach in Maldives
- Metz M55G2 4K Android TV Review: So Good, it Should Cost a Lot More Than Rs 42,990
- Jio Effect: Tata Sky Broadband Offers 6 Months Additional Usage on Annual Plans
- 'Choked' by Husband’s Extreme Love and Affection, UAE Woman Seeks Divorce
- Android 10 Confirmed to Arrive on All Nokia Smartphones