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Peugeot-Citroen assessing Indian market entry

Peugeot-Citroen assessing Indian market entry

Mumbai: Europe’s second-biggest carmaker PSA Peugeot Citroen is exploring various entry routes into the Indian automobile market but has not yet taken a decision, a spokesman for the group said on Monday.

“We are currently assessing the opportunities offered by the India market and the way to enter this market, but we have not taken any decision yet," Laurent Cicolella told Reuters by telephone from France.

The company is also assessing whether it should enter India on its own or with a partner and whether it should launch a compact car in the country.

“The points...mentioned, are part of the assessment," Cicolella said in reply to e-mail queries.

The Financial Express newspaper had reported on Monday the French automaker was expected to tie-up with Caparo India, a wholly owned unit of UK’s Caparo Group, founded by well-known non-resident Indian Swraj Paul.

Cicolella said that there were no “discussions ongoing" with the Caparo Group.

Global carmakers that operate in India reckon the price-sensitive compact car segment offers the best way to grab market share.

The compact car segment, with a share of 70% of the total passenger vehicle market and currently dominated by market leader Maruti Suzuki, is starting to expand as more cars enter the segment.

Ford, which has so far been selling mid-sized sedans in India, is set to launch a small car in India early next year.

Apart from Ford, Toyota, General Motors and Volkswagen have lined up their small car launches for next year while another French carmaker Renault plans to enter the segment in India in 2012.

Peugeot, which sells the popular small hatchback 207 in Europe, has said in the past it is looking at external growth opportunities and would consider acquisitions or partnerships to grow in markets where it hopes car sales will hold up.

It also raised its full-year outlook and unveiled a plan to lift earnings via productivity improvements, cost cuts and more sales in emerging markets.

China, Latin America and Russia are the firm’s top three picks for international growth, Cicolella said.

In China, it has set up its second plant with partner DongFeng Motors, while it has two plants in Brazil and Argentina. In Russia, the company will start to assemble cars at its new plant in March 2010.

Peugeot had, in the 1990s, entered into a joint venture with India’s Premier Ltd to make the Peugeot 309 in India, but the venture failed.

“It (Peugeot) is a company known for its small cars in Europe," said Peter Haynes of JATO Dynamics, which provides data on vehicles worldwide.

“I think Peugeot, like any other automobile company, is looking at big developing markets like China and India for growth," he added.

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