French car-maker PSA Peugeot Citroen will start work on its plant at Sanand in the first week of November, a company official said. The company announced on September 1 that the company would return to India after 10 years and set up its facility in Gujarat. American car-maker Ford Motors too has began its work on its second Indian facility that will roll-out the first car in 2014. While Peugeot plans to invest Rs 4,000 crore, Ford too will invest a similar amount and have a capacity to produce 1.65 lakh cars annually.
Senior Peugeot officials recently met Gujarat chief minister Narendra Modi and discussed their plans. “Stone laying ceremony will take place on November 3 at the 600 acre site at Sanand,” said an official in Chief Minister’s Office.
The European car-maker will produce B-plus, C and D class cars for the Indian market. Its model 508 will be the first to roll out in 2014. Company officials have earlier said that certain changes in the C-class cars will be made to suit the requirements of the Indian customer. Later, Peugeot will also bring its hybrid (diesel and electric) vehicles to India. It has already tied up with Ford for diesel engines and with BMW for gasoline engines.
The company had also inked a memorandum of understanding for setting up an institute for skilled manpower for the industry. Philippe Varin, chairman of the board of PSA Peugeot Citroen also had earlier said that the company will have high rate of indigenisation in terms of spares used in the car.
The state government has provided 600 acre plot to Peugeot adjoining the site for the mother plant of Tata Nano in the North Kotpura village of Sanand district. Of this, 100 acre will be used by its vendors. This is company’s reentry into the Indian auto market after a decade, when its joint venture with Premier Automobiles Limited did not materialise.
India is poised to become the third largest car market in one decade followed by the US and China. However, it is the third month in succession that car sales have dipped in the country. According to figures released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales stood 1,65,925 units in September against 1,68,959 units in the same month last year indicating a drop of 1.8 per cent.