Peugeot starts work in Gujarat, at Sanand

Peugeot has marked its re-entry in India with start of conducting a stone laying ceremony for its Rs 4,000 crore facility at the project site at Sanand situated about 40 kilometers from Ahmedabad.

Peugeot will roll out its first car from the Sanand plant in mid-2014. The 600 acre plot will produce 1.7 lakh cars in the first phase and will raise it to 3.4 lakh in 2016. The upcoming facility will also be used to manufacture petrol engines and gear boxes.

Peugeot will enter the Indian market with its model 508 in the D-segment but will gradually focus more on the C and B plus segment, which constitute 80 % of the Indian market. Peugeot will also bring its hybrid (diesel and electric) vehicles to India

The French car maker will use the top to down strategy to enter the Indian market and build a brand name before it enters the volumes market. It claims to have fuel effluent models in India and is also working on a model suited for Indian market. The company is working closely with its suppliers for sourcing auto components.

Gregoire Oliver, CEO of Asian operations told media persons after the ceremony. “Peugeot’s vision of becoming a global player would remain incomplete without India,” he said.

The R&D for Sanand plant will be slowly shifted from Europe to India. They said Peugeot is launching the diesel hybrid cars in Europe which it will import into India as well.

Most of Sanand produce will be sold domestically but it will also export some right-hand driven cars to countries like Australia, ASEAN nations and other. The Sanand plant will achieve about 8% localization by 2015 and will have a vendor park next to it.