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French auto major Peugeot set to re-enter Indian market


French auto major Peugeot looks set to re-enter the Indian market which it exited in the late 1990s. Peugeot-Citroen is currently prospecting locations around the country, including Tamil Nadu, to set up a manufacturing plant. 

The lure of the thriving Indian passenger car market (which is expected to grow from the present two million cars a year to six million in 10 years time), particularly at a time when Peugeot's market share in Europe is eroding, seems to be too strong to resist. 

State government officials confirmed the development to TOI. "We are in discussions with the company. The plant would be located near Chennai," said Rajeev Ranjan, principal secretary, industries department, government of Tamil Nadu. "Everything is still at the discussion stage at this moment." 

Details of size of investment, planned capacity or location of the plant is not available. Peugeot could not be reached for a comment either. 

Sources added that Peugeot was exploring various options — from assembling imported units to setting up a full fledged factory — on the outskirts of the city. 

If the plant comes up near Chennai, it would make Peugeot, the second French major to enter Tamil Nadu after Renualt-Nissan. 

Chennai is also home to Hyundai, Ford, Mitsubishi and BMW and currently has the highest installed capacity of cars in India - 10.80 lakh. 

At a recent event, deputy chief minister M K Stalin had said, "Chennai will have capacity to produce 12.8 lakh cars and about 3.5 lakh commercial vehicles each year. This translates to an output of three cars every minute and one commercial every 75 seconds." 

Attractiveness of Chennai is the presence of a supporting eco-system. The city along with its suburbs hosts a large number of automotive component makers and a large talent pool of skilled engineers and diploma holders.

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