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PSA again exploring India opportunities
Livemint, 16 February '09
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In another indication of its on-again, off-again approach to the Indian market, PSA Peugeot Citroen, Europe's second largest car maker by sales, continues to test the waters here.

A senior PSA executives Frederic Saint-Geours, board member and adviser to chief executive officer, and Rajesh Nellore, managing director for India operations, met Andhra Pradesh government officials to explore investment opportunities in the state. B. Sam Bob, principal industries secretary of Andhra Pradesh, described the talks as "preliminary". PSA is also exploring investment opportunities in other states, he added.

PSA is no stranger to the Indian car market. Post-liberalization, its Peugeot unit was one of the first entrants in India through a joint venture with Premier Automobiles, to make the Peugeot 309. Labour problems at Premier's Kalyan plant in suburban Mumbai had delayed production.

In 2001, Peugeot pulled out with only a few thousand cars sold. But now, shrinking car markets in the West have prompted car makers such as PSA to look at the developing world with renewed interest. Indian units of Ford Motor Co., General Motors Corp. and Toyota Motor Corp. have continued to invest in India even as their parents posted losses.

Ford plans to put in $500 million (Rs. 24.35 billion) in capacity expansion and a new plant. General Motors inaugurated its 140,000-unit Talegaon factory on the outskirts of Pune in Maharashtra in September. Nellore, who worked previously at components firm Johnson Controls joined PSA last July to head India operations and opened an India office in October.

The company plans to develop India as a sourcing hub. "We were actively sourcing in India through our partners Magna Steyr but we're looking at taking a more direct approach," said Nellore. He declined to comment further.

In November, PSA held customer clinics in New Delhi and Mumbai to get feedback on its cars. The Peugeot 207, 308 and 408, and Citroen C5 and C6 were on display.

PSA's tried and tested diesel technologies could also give it an edge in the Indian market, said Paul Blokland, director of Segment Y Automotive Intelligence, an automotive intelligence firm. About half the cars sold in Europe run on diesel engines.