REPORT: PSA to Partner Again on Carmaking in India

PSA Group is partnering with Indian conglomerate CK Birla Group to assemble roughly 12,000 vehicles per year in the country, sources tell Les Echos.

The French newspaper says PSA plans to announce the joint venture on Wednesday.

The companies will set up production at a Hindustan Motors plant in Chennai that currently is assembling a low number of Mitsubishi Motors Corp. vehicles. The Birla family launched Hindustan Motors in 1942.

PSA attempted to assemble Peugeot 309 small cars in India in the 1990s through a venture with Premier Automobiles. But the partnership ended in 1997.

The company also scrapped plans in 2011 to build a €600 million ($644 million) factory in Gujarat after slipping into near bankruptcy. That facility was to have annual capacity to make 170,000 small and midsize sedans.

Under its current Push to Pass recovery plan, PSA aims to hike its sales in Asia Pacific 50% to 30,000 units per year by 2021. Les Echos notes that India’s annual car market is projected to double in size to 6 million units by 2020.