Peugeot, the renowned French automobile manufacturer, signed a joint venture agreement with Indian automobile giant Premier Group in 1994, to produce cars in India. This agreement was a significant step in establishing the foothold of Peugeot in the Indian automobile market, which was then dominated by Maruti Suzuki, Tata Motors, and Mahindra & Mahindra.
The joint venture, named Peugeot PAL India Ltd, was formed with a 51:49 partnership between Peugeot and Premier Group, respectively. The agreement allowed Peugeot to leverage Premier Group`s strong manufacturing capabilities and established dealer network in India, while Premier Group could benefit from Peugeot`s expertise in design and technology.
The first car produced by Peugeot PAL India was the Peugeot 309 sedan, which was launched in India in 1996. The car was well-received by the Indian market, thanks to its advanced features and stylish design. However, the high price of the car and the lack of a diesel option led to limited sales, and the production of the Peugeot 309 was discontinued in 2001.
In 1998, Peugeot PAL India launched the Peugeot 405 sedan, which was an upgraded version of the popular Premier 118 NE. The Peugeot 405 was a more affordable option than the Peugeot 309 and offered better fuel efficiency. However, the car failed to attract enough buyers, and production was halted in 2002.
Despite the limited success of the Peugeot PAL India joint venture, it paved the way for other foreign automobile manufacturers to enter the Indian market. The joint venture also helped Premier Group gain valuable knowledge and experience in automobile manufacturing, which it later used to launch its own successful automobile brand- the Premier Rio.
In 2017, Peugeot announced its plans to re-enter the Indian market after a gap of two decades. The company acquired the Indian car manufacturer Hindustan Motors Limited and plans to invest heavily in establishing a manufacturing plant in India.
In conclusion, the joint venture agreement signed by Peugeot and Premier Group in 1994 was a significant step in establishing the presence of Peugeot in the Indian automobile market. Though the venture had limited success, it opened doors for other foreign manufacturers to enter the market and laid the foundation for Premier Group to launch its own brand. The re-entry of Peugeot in the Indian market in 2017 is a testimony to the growth potential of the Indian automobile market and its importance in the global automotive industry.