In the Beijing Auto Show 2012, the PSA Peugeot Citroen has made an announcement that it may manufacture cars in collaboration with General Motors in India, which is also its new global partner. This may also result in Peugeot dropping its plan of investing US $850 million (650 million Euros) in its upcoming factory. Mr. Gregoire Olivier, Chief, Asian Operations, Peugeot is of the opinion that the company will need the help of the General Motors facilities by which both the companies can move forward to explore new opportunities together. This will help Peugeot come back to the subcontinent of India and for this purpose there is no need to use the 600 million Euros. He further added that if all goes well and as per plans the firm may also come up with its own manufacturing facility in the future.
However, Lori Arpin, Spokesperson, General Motors indicated without letting out any kind of details that the firm has no objective of assembling cars in India for the Peugeot. Currently the General Motors and Shanghai Automotive Industry Corp are involved in a joint venture. Through this joint venture the firm sells vehicles like the Chevrolet Beat and Chevrolet Spark in the automobile market of India. At the same time the firm is introducing its hatchback Chevrolet Sail, Chevrolet Enjoy MPV with seven-seat capacity and a sedan. With its factories located at Halol in Gujarat and Mumbai, General Motors has been doing well with its present production capacity. As for Peugeot, the French auto giant has been in India till the year 1997 with Premier Automobile Ltd. in a joint venture but somehow the partnership did not work out well and it ended.
Peugeot has been looking around for an opportunity to re-enter the growing market of Indian automobiles for two long years now when last year in September it made the announcement to invest for a new manufacturing facility in Gujarat. The firm intends to make its re-entry with a compact car in India. As per Mr. Dan Akerson, Chief Executive Officer, General Motors “this collaboration between the French and American automobile giants is fundamentally a ‘European-centric strategy’ but at the same time one can’t deny that the opportunities from this co-operation could also be great. The possibility of venturing into the South American and Asian automobile market together in a more matured and benefiting manner could be the advantageous preposition out of this partnership.”
For a moment if we imagine both the international companies coming together to build up what Peugeot desires for the Indian automobile market, a compact car,then this entry level car would definitely give a lot of other existing automobile manufacturing firms a good competition because the Indian consumer will get one more option to choose from when he goes to buy a small compact car.