PSA Peugeot-Citroen appears to be finalising plans to set up manufacturing base in India. A high–level delegation this week met the chief minister of Tamil Nadu (a coastal state in Southern part of India), Ms J Jayalalithaa, in Chennai, to present a proposal to set up an integrated automobile plant in Sriperumbudur, 45km west of the capital Chennai regarded as a key automobile hub in India. The delegation was headed by Gregoire Olivier, head of Asian operations.
Nonetheless, PSA on Friday issued a “clarification about Peugeot’s project in India”.
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“The decision related to the location of a future plant in India is not taken at this stage,” the automaker insisted.
“Gregoire Olivier, member of the managing board and executive senior vice president for Asia, met this week with high-ranking authorities of Tamil Nadu and Gujarat to discuss the matter. [Siting the] plant in Andra Pradesh [state] also remains an option.”
It should be noted that this is the second time that the French automaker has tried to enter the Indian market. Earlier, it had an operation in Kalyan near Mumbai. In March the Hindustan Times reported the automaker had had a partnership with the Premier family resulting in a joint venture called Peugeot PAL India, from which it pulled out in in 2001.
The new project – if it goes ahead – would likely provide direct employment to 5,000 people and indirect work for 15,000 people.
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By GlobalDataThe Peugeot delegation also met the chief minister of the western state of Gujarat on Thursday. The state also offered attractive investment options. Tata Motors relocated its plant to Sanand in 2008, after it had to close down its 95% complete Nano plant in Singur, West Bengal after local farmers began violent protests over land seizures.
The Peugeot officials also visited special investment regions like Sanand and Dholera in Gujarat. Nothing concrete has emerged from the discussions as Peugeot seeks comparable concessions to that won by Tata Motors.
A final decision on plant location will lead to a number of French auto component makers setting up base around the proposed plant.
PSA’s Indian plan envisages investment of around US$889m in a wholly owned subsidiary which would manufacture 300,000 cars annually to supply both Indian and export markets, like the Hyundai, Maruti Suzuki, Ford and Renault-Nissan plants already here.
Though the land has yet to be allocated, it would likely be around 400 acres. The key southern automobile hub would be set to grow to 1.5m units of annual capacity as the region is already home to Renault, Hyundai and Ford.
Peugeot’s potential return is part of the automaker’s strategy to go global, to look beyond Europe for growth. India emerged as part of Peugeot’s global vision, though it lagged behind China, Russia and Brazil. The French automaker is targeting 50% market share outside Europe compared to the current 39%.
FRANCE: Peugeot to (re)start operations in India
