PSA Group and CK Birla Group sign agreements to produce and sell vehicles and components in India


The PSA Group and the CK Birla Group on Wednesday signed agreements to produce and sell vehicles and components in India by 2020.

The ceremony of signature laid the foundation for a long-term partnership between the two Groups, representing a key milestone in the development of the PSA Group in India, a cornerstone of its strategic growth plan ‘Push to Pass’.

The partnership entails two joint-venture agreements between the PSA Group and the CK Birla Group companies. As part of the first agreement, the PSA Group will hold a majority stake in the joint-venture company being set-up with HMFCL for the assembly and distribution of PSA passenger cars in India.

As per the second agreement, a 50:50 joint venture is being set-up between the PSA Group and AVTEC Ltd for manufacture and supply of powertrains. The manufacturing sites for both vehicle assembly and powertrains will be based in the state of Tamil Nadu.

The initial manufacturing capacity will be set at about 100,000 vehicles per year followed by incremental investment to support the long-term project.

The manufacturing capacity for powertrains will cater to the domestic market needs and global OEMs.

The performance of the industrial set-up will be supported by a significant level of localisation, in order to reach the necessary cost competitiveness.

CK Birla, Chairman, the CK Birla Group, said, “We have embraced ‘Make in India for India and the World’ for several decades and are among the early adopters of frugal manufacturing in the country. I am confident that the coming together of the latest state-of-the-art technology from the PSA Group and the engineering and manufacturing excellence of the CK Birla Group will benefit the automotive sector in India.”

This long-term partnership will allow both companies to participate in the growth of the Indian automotive market, which is expected to reach eight to ten million cars by 2025.