French carmaker Groupe PSA is planning to focus on cleaner fuel including electric powertrain and SUVs for its Citroen brand to carve a space for itself in the highly competitive Indian passenger vehicle market.

Groupe PSA is working on a mass market small electric SUV codenamed eCC21, which is likely to be priced around Rs 8 lakh and hit theIndian roads in 2022, probably before Hyundai brings the first car under the Korean company’s Smart EV project.

It will compete with the existing Mahindra E-KUV-100 as well as Tata Motors’ HBX small SUV and Renault’s Kwid EV which are likely to come with electric powertrains in the next 12-24 months. Maruti Suzuki too has plans for WagonR EV, which is under development, however its launch has been deferred. Toyota is likely to share the same WagonR EV.

The vehicle will be produced out of the Thiruvallur facility in Tamil Nadu that Groupe PSA had acquired from CK Birla Group company Hindustan Motors.

But before the EV, a top of the line premium mid-size SUV, the C5 Aircross, will be launched in 2021, followed by a flexi-fuel small SUV that is compatible to run on a 1.2-litre petrol engine with ethanol blends starting from 27% to entirely on the biofuel, in the second half of 2021. This small SUV may give the company a first-mover advantage in the flexi-fuel space in India, said several people in the know.

The CC21 small SUV project is part of a smart car platform, internally called the C-Cube, which is being developed specifically for emerging markets. India is expected to be a key exports hub for such vehicles for the French car maker. The CC21 SUV will be followed by a compact SUV, CC24, to challenge the Maruti Suzuki Vitara Brezza and the Hyundai Venue, in 2022 and a compact sedan the following year.

Groupe PSA’s spokesperson said their global portfolio has electric vehicle platforms, for India, they will share more about future product & propulsion portfolio, closer to the launch.

“We will be in line with the local market needs, requirements and readiness for new technologies.”

The company had earlier planned to make India the export hub for the SUV EV, but then decided to move the manufacturing base to Europe with key parts being sourced from India.

It is developing a flexi-fuel car for India even as the government is pushing the industry to move towards biofuels as the country tries to reduce its fuel import bill.

Ethanol-blended petrol usually fares better in terms of CO2 emissions and also enhances the octane number of the fuel, hence gives higher performance, said Suraj Ghosh, the principal analyst for powertrain at IHS Markit.

At present, most of India’s oil marketing companies have attained about 5-7% ethanol blend. For blends with ethanol content up to about 10%, no modifications are required in the existing internal combustion engines. But for blends with higher ethanol content, the engine has to be mapped or tuned accordingly.

Any carmaker looking to introduce flex-fuel technology in India must be wary of the available fuel quality and blend levels, Ghosh said.

“Use of biofuels in automobiles has the potential to reduce the country’s fuel import bills and also help in lowering its carbon emissions. But ethanol production is highly water-intensive, and with rapidly depleting groundwater levels, our policymakers need to take a holistic approach to solving the high crude oil bill and air pollution problems,” said Ghosh.

Citroen has set itself a very modest India sales target of 3,000 units per annum for its electric vehicle and a mid-term plan of selling 1 lakh car

On the prospects on Indian market post pandemic, Groupe PSA spokesperson said the company along with its dealers, agencies and vendors understands the challenges to business this pandemic poses, as the global business isolation impacts all multinational projects. The group, however, remains firmly committed to India and is working closely with all stakeholders, ensuring business continuity and implementation of our India plans.

“The Indian market currently is on its way towards recovery. As it can be seen, the auto industry numbers for August and September 2020 are looking much better than the figures of June and July. With the festive season coming up, we expect the market to receive a positive boost towards better sales. We continue to remain optimistic, and believe the future will definitely be better than the past,” said the spokesperson.