Leaving India: The Peugeot Story

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Case Details:

Case Code : BSTR023
Case Length : 9 Pages
Period : 1994 -1997
Organization : Peugeot Premier Automobiles Ltd
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Automobile & Automotive

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Gone Forever?

Peugeot's announcement in August 1999 that it had agreed to license its diesel engines to PAL for 5 years took observers by surprise. Peugeot also decided to write off claims on PAL amounting to Rs 850 million on account of license and technical fees.

The fact that the deal did not involve any royalty payments and that Peugeot had agreed to transfer its stake in the joint venture to PAL added to the mystery. In January 2001, Peugeot Citroen and Telco began discussions for introducing a luxury car in India. There were also reports of Peugeot planning a tie-up with the Indian two-wheeler major Hero Honda to enter the motorcycle segment in India. Interestingly enough, the FI's were reported to be planning to use their clout in the Foreign Investment Promotion Board (FIPB) to protest against the re-entry of Peugeot. However, in July 2001, after the completion of various feasibility studies, Telco and Peugeot decided against going ahead with the project for the time being...

Business Strategy | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

Exhibits

Exhibit I: Peugeot's Global Presence*
Exhibit II: Income & Expenditure Statement of Pal-Peugeot

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