Leaving India: The Peugeot Story|Business Strategy|Case Study|Case Studies

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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Background Note

The history of Peugeot dates back to the early 1800s, with the France-based Peugeot family setting up a milling business. In 1810, the family converted its grain mill into a steel foundry, which began supplying springs to the clock industry.

Over the next few decades, the company soon diversified into producing coffee grinders, razors for hairdressers, sewing machines, roasting spits, clocks, garden furniture, bicycles, tricycles, and gramophones, through the company Les Fils de Peugeot Freres (LFdePF). In 1896, a new company, 'Automobiles Peugeot Company' (APC) was formed which began producing cars and trucks. By 1913, it was credited with having produced half the cars in France. The initial models of the company included Type 15, Bebe Peugeot and Peugeot Lion. In 1910, LFdePF and APC were merged to create Automobiles et Cycles Peugeot (ACP). In 1921, Peugeto acquired a carmaker De Dion Bouton. Five years later, ACP was separated into two companies, Cycles Peugeot and Societe des Automobiles Peugeot.

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In 1929, the Peugeot 201 was launched, becoming the first model whose name included a '0' for the second digit.2 The next few decades saw the company expanding significantly on a global scale. In 1974, Peugeot acquired 38.2% stake in Citroen,3 with each company maintaining its model range and sales network.

Peugeot took over the management of the combined organization and shared operations such as research, purchasing and investments. In 1976, Citroen was merged with Peugeot. By 2001, Peugeot Citroen was present in over 142 countries (Refer Exhibit I) and had diversified into an automotive equipment, transportation and finance businesses with sales of over 27,025 million euros. Peugeot's partner, PAL, was one of India's first automobile manufacturing companies, established in 1944 by the Walchand Hirachand family. The family owned many other businesses, including Hindustan Shipyard, Hindustan Aeronautics, Hindustan Construction, Rayalgaon Sugar and Walchandnagar Industries. In the early 1950s, PAL entered into a technical agreement with the Italian automobile major Fiat for manufacturing Fiat 500 in India...

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2] Till date, all Peugeot vehicles have '0' as the second digit in their names.

3] Citroen was established in 1916, when Andre Citroen converted the Qaui de Javel armament plant for vehicle production. The first car was produced in 1919.

 

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