GM-Peugeot alliance to stay within Europe, no scope for extension to India

The alliance between the American car maker, General Motors (GM) and the French brand, PSA Peugeot will be confined to the European markets and there is no scope for its extension to India. A senior official of GM confirmed the news, “There is no discussion with Peugeot (regarding an alliance in India).”

GM already has an operational manufacturing plant in Gujarat and Peugeot is also planning to set-up its own plant here. According to speculations, Peugeot was expected to use the existing plant of the American car maker instead of setting up their own. Earlier in 2012, during the month of February, GM had bought 7 per cent stake in Peugeot in a bid to share design platforms and source parts.

The Head of Asian operations for Peugeot, Gregoire Olivier, said, “We now have GM as a global partner, and GM has factories in India, so we're obviously reviewing our plans from the top.” This statement from the Asian head of the French car maker contradicted the hunches regarding the car maker's plans for India.

The speculations gained momentum due to Peugeot’s strategy of taking it easy with its upcoming facility at Sanand in Gujarat. During September, 2011, the French brand had announced that it will invest around Rs. 4,000 crore in the project to establish an integrated production unit, powertrain and gearbox plant to manufacture cars.

Gujarat government has allocated the company 600 acre of land, with a capacity of producing 1.65 lac units every year for starters and an additional provision for expansion in future. Peugeot has also inked a State Support Agreement (SSA) with the government in this context. The European car maker, Peugeot laid the foundation of its plant in November, 2011.