Peugeot plans massive auto investment in India

The Indian state of Gujarat is set to welcome an investment of €650 million ($914 million) from Peugeot (Paris, France) in an automobile assembly facility plus engine/gearbox plant to be constructed on a 600-acre site in the heart of the rapidly developing Sanand automotive cluster near the city of Ahmedabad. The complex will have initial capacity for 170,000 vehicles annually.

The Indian state of Gujarat is set to welcome an investment of €650 million ($914 million) from Peugeot (Paris, France) in an automobile assembly facility plus engine/gearbox plant to be constructed on a 600-acre site in the heart of the rapidly developing Sanand automotive cluster near the city of Ahmedabad. The complex will have initial capacity for 170,000 vehicles annually.

 India 1
Chief Minister of Gujarat, Shri Narenda Modi (center) and Philippe Varin (right), Chairman of the Managing Board of PSA Peugeot Citroën shake on the mega-investment deal
This investment will directly add up to 5,000 new jobs to the automobile hub and also create further economic and employment opportunities through an extensive supplier park adjacent to the site to provide the company with necessary parts and services. The first locally produced Peugeot car is expected in 2014. At first, a Peugeot sedan will be built at Sanand and subsequently, the plant will also assemble the company's popular 508 model.

"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," says Philippe Varin, Chairman of the Managing Board of PSA Peugeot Citroën. "Gujarat offers a proactive business friendly environment, excellent infrastructure and is geographically well-positioned to cater to passenger car markets across India".

Peugeot and the Government of Gujarat also intend to create an Automotive Skills Development Institute (ASDI). This initiative reinforces Peugeot's commitment to deliver a globally consistent level of high quality production, products and services to its customers and will contribute to the development of highly skilled automotive manpower in the region.

Indian vehicle production grew by 26.7% in the year ended March 2011 to almost 3 million vehicles following growth of 28.2% in the previous financial year. Production has almost doubled over the past four years. Besides local players such as Tata, Mahindra and Bajaj (three-wheelers), global auto makers such as Suzuki, Honda, Ford, VW, Renault, Nissan, GM, Hyundai, Toyota, and Fiat already operate manufacturing facilities in India.-mpweditorial@ubm.com

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