French auto major Groupe PSA partners TCS for its Smart Cars plan

In an attempt to design and develop products for Indian buyers at Indian cost with a motto 'Be Indians in India', the French auto major Groupe PSA has partnered Tata Consultancy Service (TCS) to develop and engineer its ambitious Smart Cars plan.

PSA has decided to rely on Indian engineering after TCS proved its mettle globally and will now compete strongly with Maruti and Hyundai.

The contract was bagged by TCS after beating its sister group Tata Technologies for the Smart Cars plan, the Economic Times reported.

Apart from this contract, TCS is also working extensively with Nissan Motors and Japanese carmaker Isuzu Motor.

Apart from PSA, Volkswagen Group has also engaged in a discussion with the likes of Mahindra Engineering Services, Tata Technologies, Hinduja Technologies amongst others to decide their emerging market MQB A0 project.

TCS will walk alongside with PSA right through the process of sourcing, design, development, right upto execution till the vehicle is homologated, according to ET report.

TCS will essentially work on 'art to part', all the soft designs will be offered by PSA. It will be TCS's responsibility to source the part at right cost, test its metallurgical capabilities, convert it into a vehicle part and homologate, said a one person involved in Smart Car project on the condition of anonymity.

PSA plans to develop three cars out of India and is codenamed SC21, SC24 and SC26.

The auto company sees a cumulative volume of 1 lakh by 2025 and expects to corner 2 per cent of the growing passenger vehicle market, said another person in the know of things.

Essential idea is to deliver the vehicle on "built to cost" and accordingly vendors have been asked to quote. Following the partnership with TCS, the company is likely to kick off its India project with a very high local content of over 90 per cent, which will allow PSA to cut cost to the tune almost 20-30 per cent from its global cost benchmark, but the parts will have to go through PSA's global quality standards even with lower cost. 

The priority will be to produce and sell a range of cars which will meet the expectations of Indian customers with state-of-the-art technologies, the company spokesperson to ET.

The company will locally manufacture 1.2 litre and 1.4 litre petrol engines and 2 litre engines some of which are likely to be exported and plans to produce 2,00,000 engines and 3,00,000 transmission at its peak, with shipment likely to begin by the first half of 2019.