Though India is the fourth biggest car producing nation in the world, and is expected to get to the number three spot in a couple of years (when it overtakes Germany), it still remains one of the most difficult markets for any new automotive brand to enter. In fact, in recent years, brands like Chevrolet (GM) and Fiat have, instead, exited the country. So, what could be the motivation and or expectations for the likes of Kia and PSA’s Citroën to enter the Indian marketplace?
South Korea’s Kia, of course, has the advantage of parent brand Hyundai’s successful two decades in India, and Kia is expected to ride on Hyundai’s experience and understanding of the Indian marketplace, as much as the extensive network that the South Korean carmaker has built up over the past two decades.
But what inherent advantages does Citroën have?
Groupe PSA, which owns both Citroën and Peugeot (as well as DS and Opel), has had a rather unhappy (and a very short stint) in India, in the 1990s, when with the Peugeot 309–was assembled in a joint venture with Premier Automobiles. They were one of the first of the automotive multi-national corporations (MNCs) to enter the Indian marketplace… but crashing out shortly thereafter, when trade unionist Datta Samant and his gang struck work at the PAL-Peugeot plant. The decision to pull out of India was irresponsible. Since then, the baggage of a poor image of the Peugeot brand (one that had abandoned its customers) has remained a major deterrent for PSA’s re-entry into India.
In a discussion with Groupe PSA’s CEO Carlos Tavares—soon after he had joined PSA in 2014—this writer had recommended Citroën over Peugeot for the Indian re-entry. Most Indians do not know Citroën, so there is no baggage. And for the handful who do—the influencers and the collectors of historic vehicles—Citroën has a good image, given its storied history.
Several of the significant car collections in India feature a few Citroëns, such as Type As (the very first model that Citroen produced) as well as the legendary Traction Avant, a handful of DS and several 2CVs.
Having said that, the product that Citroen makes its entry with would be intrinsic in establishing the right image; and establishing a good image and building up a fine reputation, right at the outset, is very important. The Citroën C5 Aircross is a very distinctive product. How Citroën is able to convert a good product to an image of desirability, one where every other Indian car buyer would want to own a Citroën, is crucial.
For that, the spirit of the founder, André Citroën, needs to be revoked. André Citroën was a master at marketing innovation. When Citroën began manufacturing cars, it opened a special department that was mainly responsible for accumulating, from the dealer network, information about the clients, their names, addresses, and so on. A letter would then be sent to the customers who had visited the dealerships, thanking them for their visit and informing them of the model that would best suit them. Though this letter was printed, the signature and the person’s name would be hand written, giving the impression that the recipient of the letter was receiving one personally from André Citroën! This was decades before computers and emails. Thousands of letters were distributed throughout France every week, dramatically improving sales results. It has been estimated that 15%-20% of sales then were the direct result of this strategy.
It was not just direct marketing but at media stunts too that André Citroën excelled. On 4 October 1922, at the opening of the 17th Mondial de l'Automobile de Paris (the Paris motor show), a plane drew the Citroën letters in white smoke above the city’s Arc de Triomphe monument.
In 1925, André Citroën installed on the Eiffel Tower a huge illuminated advertisement, spelling out ‘Citroën’ vertically, with light bulbs, 250,000 of them, in six different colours!
Then there’s the story of how Charles Lindberg used the brightly lit Eiffel as a beacon to approach Paris’ Le Bourget aerodrome after his epic flight across the Atlantic, aboard the famous aircraft Spirit of St. Louis. With a penchant for the dramatic, André Citroën invited the international aviation hero to a reception at the Citroën factory, once again hogging the limelight for his company.
But for all the flamboyance and marketing flair, the company had feet of clay. André Citroën was a brilliant visionary and a great expansionist, not an accountant. In fact, the firm had financial problems from its inception. Gains made during the First World War producing artillery shells for the French army were not sufficient to cover investments, as 90% of the profits were used to pay taxes.
Before André Citroën passed away, in 1936, he had lost control of his company, to tyre-maker Michelin. Yet, under Michelin ownership, Citroën remained a carmaker known and appreciated for its Avant garde products, with cars like the very innovative Traction Avant, the 2CV and the DS establishing the company’s reputation for making some of the most distinctive and iconoclastic cars in the history of the automobile. But technology, innovation and individuality comes at a price. Into the 1970s Citroën was in major trouble, and it was arch rival Peugeot that bailed out Citroën, by taking over during 1974-76.
Incidentally, for Citroën, it won’t be the first time that they will be in the Indian marketplace—Bombay-based International Motors distributed Citroëns in the Indian subcontinent in the 1920s and 1930s, and they continued to be retailed until the 1950s.
After Peugeot’s Indian misadventure in the 1990s and its aborted entry around six years ago, the decision of Groupe PSA to come back into the Indian marketplace with Citroën is more prudent. But it may be important to remember that neither numbers nor profitability should be the main focus, as India needs to be seen as a very long-term market, with slow and steady gains at best.
Renault’s situation in India is a case in point. After a somewhat slow start, with the launch of the Duster and then the India-specific Kwid, Renault was doing very well… but then overconfidence and hubris completely eroded the advantage Renault had and, today, it is struggling in the Indian marketplace. There is a lot that can be learnt from the past mistakes of others. Humility is one of them.
(Gautam Sen is acknowledged globally as a leading automotive journalist, writer, automotive design consultant and expert from India. He founded the country’s first newsstand car magazine Indian Auto in 1986, followed by Auto India, Auto Motor & Sports and BBC’s TopGear. Mr Sen has also been directly involved with the automobile industry in India and Europe, and has worked with eminent designers such as Gerard Godfroy, Tom Tjaarda and Marcello Gandini.