With an aim to highly localize their products, PSA has started to extend their network of suppliers in India.
Groupe PSA is the French automobile manufacturer which was previously known as PSA Peugeot Citroën. The French automaker is setting out its business in the India market with the launch of the Citroën brand. Last week, the PSA Group held the India Suppliers Summit where 500 automotive component suppliers and retailers met. Reportedly, PSA has already picked more than 150 suppliers.
In India, PSA Group targets at taking a bite of 2 per cent of the whole market by 2024. Also, from its headquarter, PSA is expected to expand their global market outside Europe by 50 per cent as a part of its "Push to Pass" strategy. India market will stand on the frontline of this long-term plan.
PSA Group will make an entry into the Indian market with the launch of Citroën
"Push to Pass" is designed with the main target of turning PSA into a powerful “global vehicle manufacturer.” The first phase of the plan was executed and ended with flying colours. The manufacturer has registered a five-year-in-a-row growth. During this time, PSA also acquired Vauxhall and Opel.
I the next five year, from 2019 to 2021, the second phase of the plan will be carried out. Throughout these years, PSA will reach out to new market including India. They also put a strong focus on expanding its range and boost up electrification.
According to the Push to Pass strategy, PSA Group will expand their global market outside Europe by 50 per cent
PSA has been sourcing components from India for a while. Last year, the multinational automaker has sourced 250-million-euro components from India. PSA expects to expand the sourcing scale to one billion euros in less than five years.
In India, PSA Group targets at a high level of localization. From the beginning, a 90 per cent localization is proposed, which includes a 98 per cent localisation for the vehicle and 90 per cent for the C5 Aircross engine. PSA Group has joined the CK Birla Group to establish a joint venture in Tamil Nadu for assembling vehicles. Another plan for producing powertrain is established in cooperation with AVTEC.
At the Supplier Summit, Michelle Wen, executive vice-president, Global Purchasing and Supplier Quality, also expressed that PSA will not only focus on QCD (Quality, Cost & Delivery) but also the TCP (Total Cost of Ownership). Besides, in regard to the selection of component supplier, PSA will take other criteria such as ethical, environmental and social criteria into consideration as well.