Making its re-entry into India, French auto major PSA Peugeot Citroen (PPC) on Thursday signed a Memorandum of Understanding (MoU) with the Gujarat Government to set up an integrated manufacturing facility at an investment of Rs 4,000 crore at Sanand near here.
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 Chief Minister Narendra Modi here.
“The fully integrated facility of PPC, the first one in India, will be set up on 584 acres with an investment of Rs 4,000 crore. It will have an initial capacity of 1,65,000 units annually and is expected to be commissioned by end of 2013,” an official statement stated.
“Gujarat offers a proactive business environment, excellent infrastructure and is geographically well positioned to cater to passenger car markets across India,” PPC Board Chairman Philippe Varin said.
“We view India as one of the most important and dynamic markets in the world, with forecasts of it becoming the third largest automotive market by 2020,” Mr. Varin said.
The French carmaker was present in India through a joint venture with Premier Automobiles Ltd (PAL) nearly a decade ago. The joint venture was later wound up and the company, PAL Peugeot Ltd (PPL), stopped operations.
With the new agreement, Peugeot will be a neighbour of Ford and Tata’s Nano plants in Sanand, an upcoming auto hub some 40 km from here. The firm had been scouting for land for its India entry for the past few months in Tamil Nadu, Andhra Pradesh and Gujarat.
The facility will encompass vehicle manufacturing plant, stamping unit, body paint and assembly operations. An engine and gearbox plant will also be set up, making it a modern industrial automotive facility, the statement said.
Gujarat Industrial Development Corporation (GIDC), in collaboration with PPC, will also set up an international level Automotive Skill Development Institute on public private partnership model.
The manufacturing facility will provide direct jobs to 5,000 and indirect employment to 25,000 people. Its construction is scheduled to begin by 2011-end, it said.
PPC, announcing its India-centric plans earlier, had said the global brand will produce, as a first step, a mid-sized sedan car.
The French car maker’s aim is to have share of 50 per cent of its sales outside Europe by 2015, compared to 39 per cent in 2010.
PPC envisages exporting 25 per cent of its production from the Gujarat facility, where GIDC has also earmarked 25 acres for setting up an ancillary unit.
Headquartered in Paris, Peugeot is the fourth largest brand in Europe and moved up from 10th to 9th place in the global rankings of automotive brands. It sold more than 3,60,000 vehicles globally in 2010, the company said.