PSA Peugeot Citroen, Europe's second-largest car producer, will soon take a final call on its India plans, as senior teams from the company hold talks with state governments for a manufacturing facility.
A senior delegation from PSA Peugeot Citroen, France's leading car producer, is expected to meet the Tamil Nadu government next week.
Europe's second largest car-maker PSA Peugeot Citroen on Wednesday announced plans to re-enter the Indian market with a mid-sized sedan, ten years after it made an exit from the country.
The company plans to establish project with an initial capacity of 300,000 units per year.
The agreement was signed by Gujarat principal secretary Maheswar Sahu and PSA Peugeot vice-president (emerging market and India) Fredic Fabre in the presence of Gujarat Chief Minister Narendra Modi in Ahmedabad.
A state government official said Peugeot officials surveyed two sites -one near Sri City in Chittoor district and another near Sitarampet in Ranga Reddy district.
Philippe Varin, chief executive officer of steel maker Corus, will take over as the chairman of the managing board of French car maker PSA Peugeot Citroen from June this year.
While the carmaker still has another 300-odd acres to set up the proposed plant, state government officials said the government might sell the remaining land, too, if the demand came up in future.
Government officials said the company was likely to invest about Rs 2,000 crore during the first phase of the project. In all, it could be Rs 7,000-10,000 crore.
Though this is a fraction of the Euro 31 billion worth of auto parts the group buys in a year, there are indications that more is in the pipeline.
Following the re-entry of French car maker PSA Peugeot Citroen, the erstwhile sleepy town -- already home to Tata Motors' manufacturing plant for small car Nano -- finds itself along the country's prominent auto hubs like Pune in Maharashtra and Sriperumbudur in Tamil Nadu.
PSA Peugeot Citroen has no plans to re-enter India's car market any time soon
Gujarat has caught the fancy of a large number of corporate heavyweights.
Europe's leading car maker, Groupe PSA, officially announced its re-entry in India this April with the Citroen brand. Citroen C5 Aircross SUV will challenge the likes of Mahindra XUV500, Tata Harrier, Hyundai Tuscon, Jeep Compass and the upcoming MG Hector. The C5 Aircross will be the first of several differentiated products from the company's vehicle manufacturing unit in Tiruvallur, Tamil Nadu.
Making a debut in India with an SUV, Citroen's products in the next couple of years will clearly chart and define its destiny in what has become both a vibrant but also a daunting market for foreign entrants, says Pavan Lall.
The JV between the French auto major and India's CK Birla group is aiming at production capacity of about 100,000 vehicles a year by 2020.
It manufactures cars ranging from entry-level hatchbacks to sedans to sport utility vehicles to vans to pick-up trucks. It also has a range of electric and hybrid vehicles
Three way split of AIADMK has slowed decision-making, prompting industry to look outside the state, says T E Narasimhan.
Britain's vote to leave the European Union means uncertainty for markets and companies as London initiates at least two years of negotiations with the EU.
