FRENCH automaker Peugeot-Citroen is likely to set up its manufacturing
facility for mid-sized cars in Hyderabad or Chennai. Though investment
details are yet to be finalised, a person familiar with the development said
the proposed capital expenditure could be in the range of € 350 to million.
It’s been 11 years since the French automaker last set its sights on the
Indian market after its earlier joint venture (JV) with the Doshis of
Premier Padmini fell through. When contacted, Rajesh Nellore, managing
director of Peugot-Citroen India refused to comment.
A top level management team from Peugeot visited Hyderabad recently and
met officials in the Andhra Pradesh Industrial Infrastructure Corporation
and state Industries department to discuss the modalities of the greenfield
project. The company officials also reviewed the specifications of the site
prescribed by the state government at Adibhatla SEZ near Shamshabad
International airport. The identified land lies on the outskirts of
Hyderabad with close proximity to two international airports — Hyderabad and
Bangalore — and three seaports — Visakhapatnam, Kakinada and Naidupet near
Guntur.
Andhra Pradesh (AP) has earmarked a 1,000-acre site for the project
which was also offered to the Tatas’ Nano project earlier. Companies
investing over Rs 4,000 crore in the state are eligible for a 100% exemption
on VAT (value-added tax) for a period of 21 years. The French carmaker has
been evaluating various locations in Tamil Nadu, Maharashtra and AP for its
car project in India.
Over the past few months, the French auto major is also understood to
have discussed possible alliances with many partners in India. Earlier,
Peugeot had joined hands with Premier Automobiles to make the 309 model in
the country. While in Latin America and Brazil, Peugeot-Citroen has 100%
subsidiaries, in other countries such as Russia the company has opted for
JVs with Mitsubishi for entering a market. Peugeot-Citroen has been
aggressively targeting emerging markets to pump up sales, as volumes are
under severe pressure in its home markets.
The company, which plans to roll out cars in India in the next two
years, has chosen to make its play is above Rs 5-lakh segment. Recently, it
also conducted a feasibility study of its various Peugeot-Citroen brands
like 407, 206, 308, C4, and C5. Peugeot will be marketed as a mainstream
brand while Citroen will be targeting the top end and it intends to launch
both the brands in a short timespan. “In terms of pricing, Citroen will be
in a more premium bracket,” said an official familiar with the development.
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