Groupe PSA, which acquired the Ambassador brand from Hindustan Motors last year, has inaugurated a manufacturing plant jointly with AVTEC Ltd (a CK Birla Group Co.) in Hosur, Tamil Nadu. This marks the formal start of industrial set up of this site, which will manufacture and supply powertrains for the global and domestic automotive market. The initial manufacturing capacity of the plant will be about 300,000 units per year for the transmissions and 200,000 units for the BS-VI compliant engines.
The manufacturing plant was set up within 2 years. The plant will manufacture gearboxes in Phase I to support both the India project as well as supplying Groupe PSA needs. The peak investment in this manufacturing set up would go up to Rs. 600 crore and will generate a direct employment of around 800 people. Additionally, the performance of the industrial set-up will be supported by a significant level of localization to reach the necessary cost competitiveness.
The plant is owned by PSA AVTEC Powertrain Pvt. Ltd., a 50:50 joint-venture created in 2017 between Groupe PSA, France and AVTEC. It benefits from Groupe PSA technology and the CK Birla Group’s engineering and manufacturing expertise.
The French car manufacturer PSA Group announced last year that it would make a come back in the Indian passenger car market by 2020, saying that it would build cars in Tamil Nadu under an initial 100 million-euro ($107 million) joint venture investment with Birla-owned HMFCL, with an annual production capacity of 100,000 vehicles.
The PSA Group, makers of Peugeot, Citroën and DS cars, bought the iconic Ambassador brand from Hindustan Motors early last year. Further plans on reviving or re-launching the Ambassador as an all-new retro-lifestyle car are not known yet. Peugeot began testing of cars in the country in mid-2017.
Carlos Tavares, Chairman of the Managing Board Groupe PSA said, “We want to be Indian in India. With this inauguration, we have taken another critical step towards the execution of our Push to Pass strategic plan and commitment towards the Indian customers. The quality of the relationship with our partner, the CK Birla Group, is paramount to the success of our common project, with the creation of a complete eco-system in India.”
Commenting on the development, Mr CK Birla, Chairman, the CK Birla Group said, “We have always striven to evolve with the ever-changing needs of our customers and partners. This partnership that brings together the latest technology from Groupe PSA and the manufacturing excellence of the CK Birla Group is a step in the same direction. We are confident that this new plant will create long-term value and fulfil future market needs better.”