They say the third time is the charm. Groupe PSA, which acquired Citroën in 1976, tried to enter India twice, first in a tie-up with Escorts in 1980s and then with PAL-Peugeot 309 in 1993. Now, Citroën, among the many stellar brands constituting the €47 billion Stellantis NV, the third-largest carmaker in the world, is at the forefront of the group’s India foray. Thierry Koskas, brand chief executive officer, Citroën, and chief sales & marketing officer, Stellantis, talks about the iconic French brand’s India game plan. Interview by Rishi Kant.
CHOOSING INDIA
Before entering India, what did you learn from mistakes of others?
We have to be modest as we have just started out and do not have a miracle recipe. But we entered with an iconic product like C5 Aircross. Then, we proposed products at the heart of the market — hatchback, midsize SUV, and so on. We decided to introduce regular updates in terms of engines, electric versions and higher trims. We also built a competitive production base. This is vital as you cannot offer products that are not 100% localised and super competitive. The last point is, do not rush. We want every step to be done well. It’s a long-term strategy.
What was the thought behind choosing products for India? Transition to electric is faster than any carmaker imagined. What are your expectations?
We chose the main segments of the market. We started with a hatchback, below four metres, as that is the heart of the market. After that, midsize SUV was the logical choice, as that is also a big part of the market. We want to go into the main segments and make Citroën an accessible brand. We are proud we got an electric version so quickly after the conventional ICE one, six months before scheduled. Now, if you talk about expectations, we believe the electric car market could develop very quickly in India, which is why we want to offer something. What we did with eC3 was great. It is perfect for Indian conditions. Electric cars have a great future in India.
THE STRUGGLES
This year, there is a lot of talk about recession in western world and tapering demand for passenger vehicles in India. How will you counter the headwinds?
In a market like India, you cannot say I’m going to start, but if macroeconomic conditions are not favourable, I am going to slow down. We have a solid plan for India, one car last year, one car this year and third car next year. So, we are here to last. There will to be ups and downs because of economic downturn, but we want to be in India for many years.
Global carmakers, in general, have struggled to hold ground in India. Even U.S. counterparts called it quits. What will Citroën do differently? (1)
My first visit to India was 15 years ago. It is probably the most difficult in the world because of competitive costs. Also, Indian customers know the product well and are very demanding. The key is to have a long-term strategy and a strong product plan that keeps evolving. We will stay in India. There will be a mix of good and not-so-good moments but we will stay. The key is consistency, never giving up and fresh products. It is a difficult market but we have taken it up as a challenge. If we can succeed in India, we can succeed anywhere in the world.
THE FUEL QUESTION
What is Citroën’s view on hybrids? Do you see it as a transitory technology as Japanese carmakers believe? Or do you believe battery electric vehicle is the way forward?
It is difficult to give a single answer. For instance, in Europe, your fleet needs to be fully electric by 2035. The Stellantis brand will probably go full-electric in 2030. We believe there will be enough charging points in Europe by then. In North America, we are aiming for 50% electrification, so we will stay with some petrol engines there. And where we stay with petrol, there is an opportunity for hybrids, as they lower fuel consumption.
In long term, fully-electric vehicles will grow, as that is the only way to achieve zero emission and carbon neutrality. It is probably the right answer to rising pollution but we know it’s not going to happen immediately. In a lot of countries, including India, it will grow, but we don’t expect everything to be electric in 10 years. It will take a lot more time than that.(2)
Is Citroën looking at ICE engine-based car running on hydrogen, or is it going to be a fuel-cell-based hydrogen car?
We are heavily working on fuel cells for light commercial vehicles (LCVs) because a fuel cell takes a good amount of space. So, we are starting to have nice offerings in LCVs running on hydrogen, but fuel cell-based.
GROWTH/EXPORT OPPORTUNITY
How does Citroën look at India? Is it going to be an export hub for the world or a significant consumer of its products, or both?
India is probably both, but primarily, Citroën in India is for the Indian market. It is one of the biggest markets in the world and has the potential to become the biggest in the world. We think we have the perfect vehicles for India. After that, export is an opportunity(3) because production in India is high quality and competitive.
Is Citroën satisfied with its performance in India so far?
It has been in line with our expectations. What we wanted to do was to install the brand progressively. We wanted to avoid going after big volumes in the beginning. We are growing the network. We wanted to give confidence to investors with one car before launching the second one. The growth is in line with our plan.
One of the biggest pain points in India is dearth of customer and service touchpoints. Is significant ramp-up of operations likely?
Yes, we are ramping up the number of touchpoints. Initially, we wanted to be cautious because it gets difficult if you start with a lot of touchpoints and do not have enough volumes. That is a good start to having good operations and serving customers well. Obviously, with our second car arriving, we would be doubling the number of touchpoints soon, and that would help a lot in covering the territory.