Can Citroen succeed in India?

3 min read . Updated: 21 Feb 2021, 09:40 PM IST HT Auto Desk , Written By Mainak Das

Citroen C5 Aircross comes with 98% overall localisation in India.
Citroen C5 Aircross' powertrain is claimed to have 90% localisation.

India is one of the biggest and most lucrative auto markets in the world that is expected to be among the top 3 global car markets by 2025. Seeing the growth potential here, Citroen, the iconic French car brand with over 100 years of legacy has entred the country recently with its flagship product C5 Aircross SUV.

Previously, Citroen models used to be sold in India through an importer called French Motor Car Company set up in Kolkata in 1905 by a French Armenian diamond merchant called Michel Sevadjian. However, this time, it became an official brand entry from the iconic automaker.

(Also Read: We are focusing on comfort that nobody is talking about: Citroen)

While Citroen is projecting itself as a brand that is talking about comfort, which no other carmakers in the country talk about; convincing the Indian customers and grabbing a satisfactory market share is not going to be an easy task at all.

Owned by erstwhile Groupe PSA and currently the Stellantis, Citroen is the most profitable carmaker in Europe after recovering from near bankruptcy. In India, the automaker aims to become a mass-market player with premium products. Considering the fact that the Indian car market is forecasted to reach 6 million by 2023, Citroen is seeking to be a major player in the market.

Interestingly, such a goal is ambitious but tough to achieve. For example, General Motors and Ford – two major players in the global market aimed to be major players in the country market, but couldn’t. While General Motors stopped Indian operations, Ford was seeking collaboration with Mahindra and Mahindra in order to run its India business.

Why did global auto brands fail in India?

It is strange that global auto giants that dominate the international markets couldn’t penetrate the Indian market. In many cases, these automakers introduced the wrong products at the wrong or higher pricing. The reason behind this was the overconfidence that Indian consumers would pay a premium to own European or Japanese cars despite lack of features, not so powerful engines, and odd designs as well.

These carmakers mostly pushed the international models with little tweaks. However, such a strategy didn’t work. Instead, Indian consumers prefer models from Maruti Suzuki, Hyundai, or Honda that are made in India and offer more value for money.

Citroen’s chance of success in India

Since the beginning of its journey in India, Citroen is focusing on localisation in a bid to keep the pricing in check despite offering an international level product. With around 90% localisation on the powertrain from the start and 98% on the overall vehicle, Citroen has a chance to make a lasting impact in the highly competitive Indian market that highly price-sensitive as well.

No wonder, the French car brand will not be able to match the pricing of Maruti Suzuki, Hyundai or Honda, because of low supplier volume. However, as compared to other global automakers that bring imported powertrains at higher costs, Citroen will be able to offer more affordable products.

Avik Chattopadhyay, an auto industry expert who was associated with Groupe PSA previously, said to a publication that the French automobile group, now a part of the Stellantis after the merger with PSA took a clever call to introduce the Citroen brand in India after its third attempt at launching Peugeot here didn't work. "PSA Group (now called Stellantis, post its merger with FCA) took a clever call to introduce the Citroen brand in India after its third attempt at launching Peugeot did not work (the last was in 2011)," he said.

With such a strategy, the French car brand can become successful in the Indian market. However, only time will tell the tale.