Peugeot to set up Rs 4000-crore facility in Gujarat

Peugeot-logoFrench car-maker PSA Peugeot Citroen said it will create 30,000 direct and indirect jobs in Gujarat after it starts production in 2014. The company signed an agreement with Gujarat government on Thursday  to produce 1.65 lakh cars per annum from the Sanand facility proposed to come over 600 acres.

Peugot Citroen has 16 manufacturing facilities worldwide and the Rs 4,000-crore Gujarat plant will be its 17th. The company will export 25% of the production from the Sanand facility. Peugeot is the third auto MNC to invest in Sanand after Tata Motors and Ford Motors in the last three years.

Tata announced in October 2008 that it set up a mother plant of its ultra-small car Nano at Sanand with an investment of Rs 2,200 crore. In July 2011, Ford Motors signed a memorandum of understanding (MoU) to set up a facility with an investment or Rs 4,000 crore. General Motors was the first auto MNC to invest in Gujarat at Halol in 1996.

Facilities of the three new entrants are adjacent to each other in the Northkotpura area which was under Anand Agriculture University till October 2008. A release said: “The project will give direct employment to 5,000 people. Additional jobs will be created by supplier park adjacent to the site to provide the company with necessary parts and services.” The government said, 25,000 jobs will be created in the supplier park coming up adjacent to the main plant.

American car-maker Ford Motors announced in July that its Sanand facility will create 30,000 direct and indirect jobs. Country’s largest car-maker Maruti Suzuki is yet to sign any formal agreement with the state government to locate its first facility outside Haryana, but its chairman RC Bhargav said the project will create of 1.5 lakh jobs when the facility in Gujarat becomes functional in five years. Maruti plans to produce 20 lakh cars in Gujarat in phases.

“We are proud to announce Peugeot’s continued global expansion and to have chosen to grow our Indian roots in Gujarat. 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 a company press release quoting Philippe Varin, the chairman of the managing board of PSA Peugeot Citroen.

A State Support Agreement (SSA) to this effect was signed in the state capital Gandhinagar between the company. Tamil Nadu and Andhra Pradesh were also in the contention for the project.

The first locally-produced Peugeot car is expected in 2014. As a part of SSA, the car-maker will also set up an Automotive Skills Development Institute (ASDI) to provide the skilled manpower for the industry. The centre will be of international standards will be jointly set up by the government of Gujarat, Gujarat Industrial Development Corporation (GIDC) and Peugeot on Public Private Partnership (PPP) mode. The GIDC has earmarked 25 acres of land for the purpose.

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