Citroën Targets 90% Localisation For New Models from India

Citroën plans to produce its cars in India with over 90 per cent localisation, in order to achieve the right price-positioning in the Indian market. The company is using a strategy with a high level of local integration (over 90%) based on the two joint venture agreements between the PSA Group and the companies of the CK Birla Group (car assembly & distribution, and production of power trains).

Citroën will release a range of new models with an international scope for the first time in India, the first of which will be launched by the end of 2021. These new international models will be launched in other areas of the world after India.

Before their launch, Citroën will begin its offensive in India from 2020, by launching its flagship C5 Aircross SUV.

The Citroën production facility outside Chennai, set up with an investment of INR 6 billion, will supply powertrains and transmissions. The factory can roll out 2,00,000 engines and 3,00,000 transmissions annually. It is expected to have an initial production capacity of 50,000 cars in the first year. The company has a partnership with TCS for engineering smart cars. PSA Group and Avtec Ltd, a CK Birla Group company inaugurated their Hosur plant in November 2018. The plant manufactures and supplies powertrains for global and domestic markets.

During an press conference which took place in Chennai (southern India), Linda Jackson, Citroën CEO, formalised the Citroën’s arrival in India. This is a major step in Citroën’s internationalisation strategy, which will introduce a range of new models with an international scope in this market. The first of them will be launched by the end of 2021. In addition, the Brand will launch its New C5 Aircross SUV there from 2020.

“Launching a brand in such a large market as India is a unique and enthralling experience. With its boldness and its capacity to be inspired by the ways of life of its customers, I am convinced that Citroën has all of the assets to attract the Indian customer base. We are giving ourselves the tools to do so, with the ambition of being ‘Indian in India’, on both the industrial front with the two local JVs, and on that of the new product offering which we are introducing in the country, building on the formulas that have brought us success in Europe,” said Citroën CEO Linda Jackson.

This follows the announcement from Carlos Tavares, Chairman of the Managing Board of Groupe PSA, within the framework of the 2nd phase of the Push to Pass plan (26 February — 2018 Financial Results).

The company will focus on a strong and differentiating product offering, bearing a unique design and a benchmark usage comfort, which create value for customers, in order to rise up in an already highly competitive automobile market.

“With 1.3 billion inhabitants, India is the second-most populated country in the world and will soon be the most, in front of China. In fact, by 2050, the country should total more inhabitants than China and USA combined. It is also the youngest country in the world, with a median age of the population of 25 years old. By way of an example, the number of Indian children under 4 years of age amounts to double the entire French population! By 2025, 55% of the country’s population will be of working age, which equates to 25% of the active global population. And with levels of growth among the strongest at present, India may well become the leading global economy within a few years (5th in 2018),” read a communiqué by the company. “In terms of the automobile industry, India represents excellent potential. With a current ownership rate of only 40 cars per 1,000 inhabitants and a middle class which should grow by 75% by 2025 (going from 63 to 110 million Indians), the average growth of the passenger vehicle market in the years to come is estimated at 8% per year (going from 3.3 million units in 2018 to over 6 million by 2025). Therefore, from 2020, India should be the 3rd largest global automobile market behind China and the United States.”

Citroën plans to have one launch per year, in line with the framework of the PSA Group’s Core Model Strategy. Called ‘C Cubed’, the programme is in line with Citroën’s positioning, with three Cs for: Cool (referring to the design of the models, bearing Citroën’s unique character), Comfort (feature of the Citroën experience via well-being on board and ease of use for all occupants) and Clever (referring to the intelligent conception and the high level of local integration in order to perfectly meet the core of the market’s needs)

The conference took place in the presence of Carlos Tavares, as well as Emmanuel Delay, Groupe PSA India-Pacific Regional Director and Roland Bouchara, Citroën India Sales and Marketing Director.