PSA Peugeot Citroen has still to officially declare where it intends to set up a plant in India for its commercial and industrial operations. The places being scrutinised are Sriperumbudur, to the west of Chennai, in Tamil Nadu and Gujarat. The company intends establishing its Rs.4000 crore car plant. It was earlier reported by Motown India (in its February 2011 issue) that the company is actively looking at restarting its operations in India and is scouting for a land to set up its manufacturing facility plant in Andhra Pradesh (AP) or Tamil Nadu. The Indian arm of the French carmaker company has now proposed to establish this Indian project as a 100pc subsidiary of the parent company. It’s widely believed that the mega greenfield facility will have an initial capacity of 3.0 lakh cars per annum to cater to domestic and overseas markets. The Paris-based company focus on India is part of its strategy to cut down its reliance on the highly-saturated Western European markets. Earlier, the global economic crisis had slowed down the company's plans. Seeking support of the Tamil Nadu State Government, a high level delegation from PSA Peugeot Citroen called on the Chief Minister of Tamil Nadu, J. Jayalalithaa, at the Secretariat, regarding its proposal to establish an integrated automobile project with an investment of Rs.4,000 crore in the automobile best near Sriperumbudur. The PSA delegation included Gregoire Olivier, CEO of Asian Operations for PSA Peugeot Citroen, China, Frederic Fabre, Managing Director of PSA Peugeot Citroen India project, Jitesh Gadhia, Senior Managing Director, Blackstone, Sanju Saha, Vice President, HR and Shashikant Vaidyanathan, PSA.
"India is a key market and this new implantation reflects our ambition to become a global player. As in China, we will offer Indian customers vehicles adapted to their expectations," said Grégoire Olivier, Member of the Managing Board and Executive Vice-President of the Asia area. The Group has three strategic ambitions: become more global, be a step ahead in services and products and reinforce its operational efficiency. Its objective is to reach a share of 50pc of its sales outside Europe by 2015, compared to 39 pc in 2010. PSA project is expected to provide direct employment to about 5,000 and indirect employment to another 15,000. Once it establishes its unit, its global vendors are also expected to come up in the premises of the car plant. Furthermore, if its proposal is approved by the company, the manufacturing facility is likely to have a dye manufacturing facility for car components, an R&D centre, an assembly line for powertrains, a body-building shop, a paint shop, new technologies for a centrally-controlled room for regular functioning, and also a testing unit.
PSA Peugeot Citroen (shortly called as PSA) is the second largest automaker based in Europe and currently ranked the sixth largest automobile manufacturer in the world. During 2010, its bicentenary year, PSA had a sales turnover of US $ 67.30 billion (Rs.309,556 crore) by selling 2,142,000 cars and currently ranked 94 among Fortune 500 companies.. It is present in 160 countries with 10,000 contact points.
It may be recalled that Peugeot's first foray into India was through a joint venture with Premier Automobiles Limited in 1994 to assemble models such as the 309 for the Indian market. The agreement was scrapped three years later after poor showing of its 309 and worker agitations at its factory in Maharashtra leading to a factory lockout. Following Peugeot’s exit from India, there has been a lot of speculation about its re-entry.