Global automobile major Peugeot Citroen Automobiles (PCA) Thursday signed an agreement with the Gujarat government to set up an automobile manufacturing plant near Sanand at a cost of Rs.4,000 crore.
Welcoming Peugeot’s entry in the state, Gujarat Chief Minister Narendra Modi expressed the confidence that Gujarat would become a global automobile manufacturing hub. ‘The global auto major’s entry after Ford and India’s own Tata proves our point that Gujarat has emerged as leading investment destination,’ he added.
“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 fully integrated manufacturing unit, the first one in India, will be set up on a 584-acre plot. It will encompass a cutting edge vehicle manufacturing facility integrating stamping, body paint and assembly operations with an initial capacity of 165 000 vehicles per year. Additionally, an engine and gearbox plant using the latest and most advanced technologies, which the Peugeot Group is reputed for, will help constitute a full-fledged modern industrial automotive facility. GIDC has reserved another 25-acre land for ancillary industry. PCA envisages exporting 25 percent of the production, paving the way for Gujarat emerging as an automobile export hub, a spokesperson for the state government said.
This plant will provide direct employment to 5,000 people and indirect employment to 25,000 people. The construction near Sanand is scheduled to begin this year end and the project will be commissioned by end of 2013, it was pointed out.
The agreements were signed by Gujarat’s Principal Secretary for Industry Maheshwar Sahu and Vice President of Emerging Market Programs & India of Peugeot Citroen Automobiles, Frederic Fabre. It was also decided that the government and PCA will set up an international level Automotive Skill Development Institute in PPP mode.
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. 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.