Peugeot set to establish R4,000-crore plant in Sanand

Written by fe Bureau | Ahmedabad | Updated: Sep 1 2011, 06:18am hrs
Barely a month after inking a R4,000-crore deal for setting up an integrated car manufacturing and engine facility with American automobile giant Ford Motors, the Gujarat government is all set to announce yet another big ticket deal in the auto sector in a day or two.

State government sources indicated that the stage is all set for clinching a deal with French car manufacturer PSA Peugeot for setting up R4,000-crore four-lakh-cars-a-year plant in the vicinity of the Ford and Nano facilities at Sanand. Sources said the four member team representing Europes second largest car maker comprising Gregoire Olivier, CEO of the Asian operations of PSA Peugeot Citreon and Frederic Fabre, MD of PSA Peugeots India project are visiting Ahmedabad on Thursday to sign an MOU for the project with the state government.

It may be mentioned that the team had visited Gujarat earlier for confabulations in June, a day after meeting Tamil Nadu CM J Jayalalitha. Though the Tamil Nadu government had jumped the gun at that time, issuing a communique announcing the finalisation of the deal with Peugeot, top executives of the auto giant had expressed surprise at the announcement. Instead, after holding protracted talks with the Modi government, Peugeot officials had said they were still exploring all possibilities and locations.

In all probability, Peugeot will opt for setting up its proposed facility at Sanand. According to state government sources, in view of the fact that a large portion of the Delhi-Mumbai Industrial Corridor will be passing through Gujarat in close proximity to Sanand, the once small and sleepy town is fast becoming the most sought after destination for car manufacturing facilities. Sanand is ideally positioned with respect to major ports like Kandla, Mundra, Pipavav and Dahej too and had excellent rail and road connectivity as well. In addition, the state government is all set up to set up an auto ancilliary park at Sanand which would give a tremendous boost to auto component units as well.

Automobiles have been a priority sector for Gujarat more so since the entry of Tata Motors' prestigious Nano project. Several big players in the auto space have been visiting Gujarat of late. A top-level delegation of Maruti Suzuki holding marathon parleys with Gujarat CM Narendra Modi recently indicating their interest in setting up their seventh facility at a cost of Rs 6,000 crore in Gujarat. Leading two-wheeler giant Hero Motocorp too has indicated that it is looking at Gujarat as a possible location for a new manufacturing facility.

In order to expedite implementation of mega projects, the Gujarat government is also currently on a mega drive to create a land bank for the facilitation of such projects.