PAL-Peugeot Ltd, the joint venture company between French car maker Automobile Peugeot and Premier Automobiles, has withdrawn Peugeot 309 model from the Indian market. The company decision follows the French partner's decision to stop supply of CKDs of the 309 model to India.

With this, sales and production of the French model will stop henceforth, officials say adding that the JV company will continue to produce the petrol and diesel versions of Premier 118 NE model. Due to lack of demand for its products, the production cycle at the company's Kalyan plant has been reduced to four days a week on a single shift basis. The company is now able to produce only two-three 118 NEs per day, officials said.

During the formation of the JV, Peugeot had introduced the 309 model to India, while Premier had transferred its 118 NE model to the new company. However, despite the initial euphoria, the French car failed to make any dent into the Indian market, which was, hitherto, dominated byMaruti's Esteem. The launch of 309 model in the premium segment, where the American car giants, subsequently introduced their models further compounded the problem of the company.

As the auto boom in the country went bust in 1996, Peugeot's high priced model was the first casualty. Other models in the same segment like General Motors' Opel, Daewoo's Cielo and, Ford's Escort are also facing demand contraction.

In fact, in order to generate demand, Daewoo took a strategic step to reduce the price of its Cielo model by Rs 1.8 lakh. While due to high volumes and indeginisation, Maruti's Esteem continued to dominate the premium segment.

Pal-Peugeot's move to withdraw the 309 model from India will put thousands of Peugeot 309 owners in a tizzy, though the French car maker has assured supplies of the spare parts. However, after sales service of the company will remain a major concern as few engineers are trained to take care of 309 model. Besides, all those who have booked the car in the past, will have nooption, but to go for other model. Already the company has faced substantial cancellations to the tune of 50 per cent.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.

Murali Gopalan.
Pune, Dec 30: The Peugeot 309 and Mahindra Armada are ahead of Telco's Sumo, Sierra and Estate in the survey conducted by the US-based JD Power and Associates of select automakers in India. The study studied specific problem areas of 15 models, a list comprising the Ambassador, Cielo, Fiat Uno, Ford Escort, Mahindra Armada, Maruti 800, Esteem, Omni and Zen, Opel Astra, Peugeot 309, Premier Padmini, the 118 NE and Telco's Siera/Estate and the Sumo.

The report indicated that the industry average of problems per 100 vehicles (PP 100V) was 456. The results of those vehicles, which bettered this average, was published in the November issue of Auto India. The Ford Escort was in top place with a score of 312, which meant that the car has 144 fewer problems per 100 vehicles than the industry average of 456 PP 100V.

The Astra was second with a score of 319, followed by the Maruti Zen (352), Fiat Uno (353), Daewoo Cielo (378), Maruti Esteem (382), Maruti 800 (424) and the Omni (432). All the others were below the average of 456.

The list of those below the 456 mark included the Mahindra Armada, Peugeot 309, 118 NE (now rechristened the Viceroy), Ambassador, Tata Estate/Sierra, Sumo and the Padmini from Premier Automobiles.

Industry sources have now indicated that in this list, the Peugeot 309 was first, to be followed by the Mahindra Armada, the 118 NE, Ambassador from Hindustan Motors, Telco's Sumo and Sierra/Estate and then the Padmini from Premier Automobiles. The first in the list had a PP 100V score of 474 while the last, according to Auto India, was 884.

Significantly, the lead between PAL-Peugeot's products, the 309 and 118 NE, is 60 odd points while the Armada is barely 30 points behind the 309. The Ambassador, sources say, had a score close to 600 with the Sumo trailing by nearly 30 points. The Sierra/Estate and Padmini had PP 100 V scores of over 700.

The study factored in specific problem areas which were grouped into different categories like comfort and convenience, seats, sound system, handling and braking, transmission, vehicle interior and exterior, sound system etc. The size of the sample was around 2,500 respondents. Each of these areas was sampled and the final industry average arrived at.

One important fact of the study is that all the Maruti models have done reasonably well in that they have fewer problems than the industry average of 456. This is especially commendable given the huge volumes of cars in the company. The fact that the Uno is only a point away from the Zen speaks highly of its potential in the market and the fact that Fiat Auto could have a winner in its hands.Telco's products, which were part of the study, are below the average of 456 and the Sumo, in fact, is behind the Armada by over 100 points. The Sierra/Estate are near the bottom while the Ambassador and 118 NE have done relatively well in this "second" list. The Peugeot 309 is the only foreign model which has more problems than the industry average but this may seem of little consequence at this stage as Automobiles Peugeot has already announced its intentions to withdraw from its Indian joint venture.

Is the study a reflection of the performance of each of these vehicles in the market? Not quite, given that the Ford Escort, which occupies the prime slot, is still behind the Esteem and Astra in sales.

The Zen continues to have a clear lead over the Uno though the study puts it ahead by a single point. The Sumo has a greater number of faults than the industry average but is Telco's biggest money spinner. It is also a close runner to M&M's range in the multi-utility segment. What the survey has indicated clearly is that there are several problem areas in the Indian auto sector. Observers say, it is not as if manufacturers are complacent about this. Increasingly, sourcing technology has become the priority for top manufacturersespecially with emission norms coming into force.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.