PARIS: French automaker Peugeot is heading back to India , a market it withdrew from 20 years ago, where car ownership is still relatively low but is seen as having huge growth potential. PSA Group, which makes Peugeot and Citroen cars, on Wednesday said it had signed an agreement to set up two joint ventures with Indian conglomerate CK Birla, with production capacity initially estimated at 100,000 vehicles per year by 2020.PSA said it has not yet decided which model it will build in India, but the project represents an initial investment of 100 million euros ($107 million), of which the French group will put up around two thirds. ""There are growth opportunities there," he said.The drive is part of PSA's "Push to pass" strategy aimed at generating "profitable growth" by expanding the group's geographic footprint. It already announced new production sites in Morocco and Iran in 2015 and 2016.French rival Renault moved into the Indian market last year, producing low-cost small car Kwid in the Tamil Nadu capital of Chennai But PSA would not go down the same road, Tavares said. But insufficient infrastructure is currently putting the brakes on more rapid growth.CK Birla is a family-owned industrial conglomerate, with annual revenues of some $1.6 billion and a workforce of around 20,000.

Source: Economic Times January 25, 2017 16:16 UTC