French car manufacturer PSA Peugeot Citroën Group (PEUGF.PK) on Thursday said it will invest 4,000 core rupees or about 650 million euros in India to build vehicle manufacturing plant. As per the State Support Agreement signed between Peugeot and the State of Gujarat, a western state of India, the company will build a fully integrated manufacturing unit, engine and gearbox plant on a 600 acre site in the Sanand automotive cluster.
Peugeot added that it intends to create an Automotive Skills Development Institute or ASDI, together with the Government of Gujarat.
The proposed plant is expected to have an initial capacity of 170 thousand vehicles per year with options for further expansion. Additionally, the proposed engine and gearbox plant will use the latest and most advanced power train technologies, resulting in a full fledged modern industrial automotive facility.
The company noted that the investment will directly add up to 5,000 new jobs to the automobile hub and also create further economic and employment opportunities. The first locally produced Peugeot car is expected by 2014.
Philippe Varin, chairman of PSA Peugeot Citroën, said, "We view India as one of the most important and dynamic markets in the world, with forecasts of it becoming the third largest automotive market by 2020. Gujarat offers a proactive business friendly environment, excellent infrastructure and is geographically well-positioned to cater to passenger car markets across India."
Peugeot further noted that the creation of ASDI in partnership with the Government of Gujarat reinforces its commitment to deliver a globally consistent level of high quality production, products and services to its customers. It will also contribute to the development of highly skilled automotive manpower in the region.
Peugeot is currently trading at 21 euros, down 0.33 euros or 1.54 percent on Paris Stock Exchange.
In the U.S., PEUGY.PK closed Wednesday's trading at $30.67.
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