French automaker PSA Peugeot Citroën is reportedly in talks with Tata Motors as it is looking to re-enter the Indian automotive market, reports local publication the Economic Times. Citing unnamed sources close to the development, the news report suggests Emmanuel Delay, the head of PSA Group's India unit, is in talks with senior executives at Tata about setting strategic partnership involving joint production and distribution of Peugeot-brand vehicles in India. The two automakers are expected to extend co-operation in engine technology and vehicle platforms, and Peugeot-brand vehicles could be made at Tata's Sanand plant in Gujarat (India). Spokespeople at both the companies declined to comment on the reports.
Significance: According to IHS Automotive data, Tata operates four plants in India, one each at Pantnagar (Uttaranchal), Pune (Maharashtra), Sanand (Gujarat), and Dharwad (Karnataka), producing vehicles for the Tata, Jaguar, and Land Rover brands. Tata held a joint venture (JV) with Fiat named Fiat India Automobiles, to produce, sell, and distribute Fiat-brand vehicles in India since 2006. However, they ended their venture for the selling and distribution of Fiat cars in India in May 2012, although the partners continue to manufacture cars and powertrains, also part of the JV agreement, at the Ranjangaon (Maharashtra) facility. Peugeot was one of the first global companies to set up base in India, following the Indian government's decision to open the market. It launched the 206 hatchback in 1998 but exited the market in 2001 due to differences with local partner Premier Automotive Ltd. The company since undertook several studies to find a suitable time to re-enter the market. This included a formal announcement to invest in establishing manufacturing presence in the country in 2011. However, the automaker subsequently pulled out due to the global slowdown and domestic crisis. Peugeot has reportedly held talks with several automakers in India including Mahindra & Mahindra and General Motors India, although nothing concrete has yet been revealed.
