PSA Peugeot-Citroën to build auto plant in Gujarat
PSA Peugeot-Citroën is setting up an automobile manufacturing plant in Sanand, in the Indian state of Gujarat, with an initial annual installed capacity of 170,000 vehicles. PSA will set up a fully integrated manufacturing unit at the site, including an engine and gearbox plant, by 2014. Investment in the facility will total 40 billion rupees (US$869.6 million). It expects to expand the plant’s annual capacity to 340,000 vehicles, 300,000 engines, and 300,000 gearboxes by 2020. The move is in line with PSA’s aim of reducing its dependence on Europe. The company aims to achieve half of its vehicle sales outside Europe by 2015, compared with 38% at present. Sanand is close to major ports, such as Kandla, Mundra, Pipavav and Dahej, and has excellent rail and road links. With more carmakers setting up operations in Gujarat, the state is rapidly becoming a key auto manufacturing hub in India. A state support agreement (SSA) has been signed by Philippe Varin, chairman of the managing board of PSA Peugeot-Citroën, and Gujarat state’s chief minister, Narenda Modi. “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. Gujarat offers a proactive business-friendly environment, excellent infrastructure and is geographically well-positioned to cater to passenger car markets across India,” said Varin. The Gujarat Industrial Development Corporation (GIDC) has set aside 584 acres of land in Sanand for PSA, along with another 25 acres for ancillary industries. The investment will create about 5,000 new jobs, while about 25,000 jobs will be created at a supplier park adjacent to the Peugeot plant. PSA currently has 16 manufacturing facilities worldwide. The company plans to export 25% of Sanand’s production. (September 2, 2011)
