Sources said though the number of kits released was relatively small, it was significant given the present financial health of the company. Production of the 309 came to a grinding halt in November when Peugeot announced that it was withdrawing from its joint venture operations here. Since then, the management has been focusing on manufacturing the 118 NE and its diesel counterpart, the 1.38D.

In early April, a sudden windfall saw around 40 CKD kits of the 309 released from the warehouse. This was the first time after six months that assembly of the 309 occurred at the plant. Sources say that there are still over 200 kits in stock and the only obstacle to getting them out is money. Themanagement is, however, doing its best to keep production schedules going at the plant and the present pattern is four working days a week.

The 309 GLD, fitted with Peugeot's TUD5 engine, made its debut here in December 1996 after the five month lockout at the Kalyan plant. It was only the second diesel-driven car in the mid-size segment after the Ford Escort. However, the 309 GLD was far less expensive with an on-road price in Mumbai of Rs 7.20 lakhs. However, before its potential could really be tested, supply of CKD kits began running out and there was no way PAL-Peugeot could get a new import licence to procure more kits.

The car was effectively given a burial when Peugeot made its abrupt decision to get out of India. Without any money coming in, the CKD kits remaining in the warehouse just could not be released. The cars which were in stock were traded off to vendors in lieu of their outstandings. As observers say, the 309 GLD was the best bet going around as a diesel option as it was reasonablypriced with an engine that is rated among the best in the world.

Ironically, it is the same TUD5 that will be fitted in Maruti Udyog's Zen followed by the Gypsy and Esteem. Hyundai Motor Corporation is also apparently toying with the idea of fitting it in the successor to the Accent that will make its debut simultaneously in Korea and India.

Sources say PAL-Peugeot's managing director, JM Vakil, is the man responsible for ensuring that the plant has not shut down yet. According to them, every effort is being made to source funds which can meet basic needs like wages and other overheads. Mahindra & Mahindra's decision to drop plans of acquiring the plant was a big blow as that promised the sole avenue of survival. The news has been conveyed to Peugeot in Paris but no final decision is believed to have been made. The fact remains that the 118 NE and 1.38D still have a market and keeping their production going would be a logical thing to do.