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      Peugeot eyeing to produce vehicles with GM in India

      CarTrade Editorial Team

      CarTrade Editorial Team

      PSA Peugeot Citroen, the French multinational auto maker, announced on 24th April 2012 that the company is likely to produce vehicles in India with General Motors (GM), which is its new worldwide partner. If the company started production in the Indian market, it will be required to scrap its planned investment of 650 million euro ($850 million), which is scheduled to be devoted in the company’s own manufacturing unit.

      Gregoire Olivier, Head (Asian operations), PSA Peugeot Citroen, said that both the companies will find new ways to utilise the manufacturing unit of GM so that they can remain parallel with the Peugeot's approach of reaping long term profits from the Indian market.

      At an interview in Beijing Auto Show, Olivier further added, “We're not going to move forward by building our own factory as we'd planned to. We now have GM as a global partner, and GM has factories in India, so we're obviously reviewing our plans from the top. There are a lot of other ways to enter India now that they don't require us to put 600 million euros on the table.”

      Lori Arpin, the spokesperson of GM said that presently the company does not have any intentions to assemble Peugeot cars in India. However, he did not elaborate the statement and refused to share more information. GM is a US based auto giant, which has a Joint venture in India with China's Shanghai Automotive Industry Corporation and is currently offering Chevrolet Spark, Beat, Sail and a seven-seater Enjoy, which is yet to be launch in the Indian market. The company has established two production plants in India, basically in western part of Mumbai and in Halol, Gujarat.

      Peugeot walked out from the Indian auto market back in 1997, after the breakdown of its venture with Premier Automobile Limited. Thereafter around 15 years later, the company is again eyeing the same auto market, which is registering substantial growth. Peugeot was planning to route in the Indian market since 2009, which has finally announced the investment in the Gujarat facility of GM during last September.

      Just a couple of month after getting of the assembly plant, Peugeot announced unspecified "timetable adjustments" due to increasing losses in the European market. Olivier said that the company is expected to follow the same previous plan of entering in the Indian market by rolling out a small and a compact car. However, he refused to share the details regarding these vehicles.

      On February 29th, both the auto manufacturers, GM and Peugeot declared their venture for the development and production of cars. In addition to this, the Detroit based auto maker, GM has acquired a stake of 7 per cent in Europe’s second largest car maker, Peugeot, with a € 1 billion share issue of Peugeot.

      Dan Akerson, Chief Executive, GM, commented in Beijing that the alliance with Peugeot is fundamentally a "Euro-centric play". The opportunities of ventures are also available in the regions like South America and Asia.

      Peugeot