Peugeot-Citroen surrenders land at Sanand, Gujarat; Postpones India foray indefinitely

French automaker Peugeot-Citroen, which announced big plans for India a couple of summers ago now seems to be mulling an exit out of India. Peugeot has surrendered the 1,100 acres of land that was allotted to it by the Gujarat government, for setting up a car manufacturing plant at an investment of INR 4,000 crores. With the surrender of this land by not paying the periodic instalment that needs to be paid to the Gujarat government in lieu of the allotted land, the French automaker now it seems has shelved its Indian plans indefinitely. The automaker will instead focus on reviving its fortunes in its home European market.

2012 Peugeot 2008 Crossover Concept

In its second coming to India, Peugeot planned to assemble the 508 D-segment sedan in India during 2014, after which the 208 hatchback was expected to be launched. The French automaker was even spotted testing these cars in and around Pune. Now though, all testing has ceased ever since trouble mounted for Peugeot amidst falling sales in its bread-and-butter European market. Late last year, Peugeot tied up with the European wing of General Motors, to form a joint development, production and sourcing alliance with the American automaker.

In India though, GM has refused to lend its production facilities to Peugeot, citing capacity constraints. Therefore, Peugeot has been left with no option but to go slow on its Indian foray even as it has been forced to cut its labour force by a large margin in Europe as its losses have been mounting. The latest blow to Peugeot in Europe came weeks ago, when the French automaker was de-listed from the CAC -40 French stock index as its market capitalization has fallen to low levels. Now that Peugeot has surrendered the land in India, its second coming into one of the world’s fastest growing car markets comes under a cloud.

2013 Peugeot 301 Sedan

Incidentally, Peugeot in its first coming into India during the 1990s, tied up with Premier Automobiles Limited to form the PAL-Peugeot joint venture. This venture spawned a fine product in the form of the 309 sedan, which was available with petrol and diesel engined option. The car enjoyed an instant fan following, with the TUD5 diesel engined version finding particular favour with automobile enthusiasts in India. However, the joint venture ran into trouble with Peugeot hastily exiting India, leaving 309 sedan owners high and dry. This damaged the reputation of the French automaker quite irreversibly and its latest dilly dallying about its second coming into India isn’t doing matters any good.

Fast forward to the present, Peugeot is betting big on its new range of cars aimed at the big volumes, budget segment. One such car is the Peugeot 301 sedan which is aimed at emerging markets. Click here to read more about the 2013 Peugeot 301 sedan. Coming to the upcoming 2012 Paris Motor Show, Peugeot will showcase the 2008 Crossover, a compact model based on the 208 hatchback platform. The 2013 Peugeot 2008 crossover will take on a range of compact crossovers like the Ford EcoSport, the all new Suzuki SX4 crossover and the Renault Duster in Europe and other emerging markets. More details about Peugeot’s future plans are expected to be revealed at Paris, which is just a week away from now.

Source TheEconomicTimes