French auto giant Groupe PSA on Wednesday announced that its first product to be launched in India will be a SUV called ‘Citroen C5 Aircross’, a global product. It also announced that it will launch at least one new product every year effective 2021 – brand new one – in India. The C5 SUV will be launched first in India by the end of 2020 before being introduced in other markets. The car will be sold through retail as well as online formats.

The C5 Aircross will be assembled at the company’s Tiruvallur plant near Chennai. The company has already started production of powertrains – to be used domestically as well as for exports. Both engines and cars will also be exported from India.

The company will embark on an all India tour to identify and select dealers from July 1 and the bookings for the first product will be announced in the third quarter of 2020. Though the C5 will have limited localisation given the global brand equity initially, the company has said that its products will be localised to the tune of 95% in due course of time to be cost effective and to compete in export markets.

Addressing a press conference on Monday to announce the Citroen brand launch, Carlos Tavares, chairman of managing board, Groupe PSA, said: “The C5 will give us a strong foothold to play a serious player in India. We have lined up a range of products including under CQ (being developed) and India will be the first market to launch new products for the three years beginning 2021.”
“Unlike other OEMs, Groupe PSA will not announce or make big investments in India to avoid any heart burn. We are here to play long time and we will scale up our plans, investments step by step to ensure we are profitable from the beginning. Accordingly, we have drawn plans to make it big in India,” he said. Though C5 will not be most premium, but will have all the advanced features and will be launched at a competitive price point, he added.

Emmanuel Delay, executive V-P and head of India-Pacific, Groupe PSA, said: “We are not here to chase market share. We want to establish ourselves with quality products, service and customer experience. While we expect to do well in India, but we are looking at a meagre 2% market share over a period of 4 to 5 years and will scale ourselves step by step.”

Responding to questions, Delay said: “We need to upgrade/revamp our plant at Tiruvallur (which used to manufacture Ambassador earlier and later Mitsubishi products) to suit assemble Citroen products in India. We will have an ambition to produce 100,000 vehicles in the next few years and the Tiruvallur plant can be expanded as it has additional vacant space. The investments will be made known going forward.”

On the iconic Hindustan Motor’s Ambassador brand, Delay said: “We have to derive a suitable plan on how to relaunch the Ambassador brand in India. We see Ambassador had great brand equity earlier in India and, accordingly, we need to draw suitable plans for the brand.”

Sources in the TN government said that the French auto giant will be investing around `2,500 crore, including in its R&D set up. The company has already invested around `700 crore in its

Hosur powertrain plant apart from a few hundred crore in its R&D centre in Chennai. There are currently 300 people working in its R&D centre to design and develop new products in association with its global parent.

Speaking about the brand, Linda Jackson, chief executive officer, Citroen Brand, Groupe PSA, said: “Globally, Citroen’s success at the heart of the market is based on unique design and benchmark comfort. The India automotive market is dynamic with a high potential. We believe we have the right positioning to meet the expectations of the Indian customers. I am confident that the new C5 Aircross SUV will set a benchmark in style, comfort and innovation in its segment in India.”

Roland Bouchara, senior V-P (sales & marketing), Citroen India, said: “Our network focus will be to develop lean & phygital (physical + digital) formats with a ‘brick to click’ orientation. This seamless experience will be brought alive by personalised digital sales and service processes for our customers.”