Peugeot's re-entry into India is not likely to happen

21/03/2013 - 08:46 | Peugeot | Nithyanandh K

Most of us know that Peugeot was planning to re-enter the Indian market in a big way but the failing European car market kept the French automaker away from our land.

Peugeot 508

Peugeot even performed the ground breaking ceremony at Sanand where the car maker had been provided 584 acres of land by the government of Gujarat. However, Peugeot has postponed its further operations indefinitely to concentrate on its ailing European operations.

Peugeot was one of the worst hit manufacturers in the European crisis since the company's almost entire quantum of business came from the old continent. So it is understandable why Peugeot couldn't materialize the investment they have planned in India which was in the tune of Rs. 4,000 Cr.

The Indian plant was to have an annual production capacity of 1,65,000 units. The facility was expected to cater to domestic market as well as export markets in Asia. Peugeot planned to build their flagship 508 sedan in the proposed factory.

However, it is reported that Peugeot has skipped all the deadlines for the payment as per the State Support Agreement (SSA) and failed to procure the land allotted for the factory. Peugeot had already lost 200 acres and now the rest of the land also cannot be claimed by the company as the validity of the SSA expired recently.

The inability of Peugeot to make the 4,000 cr investment a reality comes as a setback for Gujarat's flourishing auto industry since the plant could have generated thousands of direct and indirect jobs.


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