The Economic Times (Ahmedabad, India) - US car-maker General Motors' alliance with the French car-maker PSA Peugeot is restricted to Europe and there is no proposal for co-operation in India, a senior official of General Motors said on Monday.
GM has its manufacturing facility in Gujarat, while Peugeot is coming up with it facility in the state and there were reports that Peugeot may use GM's facility instead of coming up with a greenfield facility. "There is no discussion with Peugeot (for an alliance in India).
The tie up is likely to be confined to European markets," said Lowell Paddock, president and managing director of General Motors in India, in Ahmedabad while launching a version of Chevrolet Cruze. In February this year, General Motors had bought 7% stake in Peugeot to share vehicle architecture and jointly buy parts.
A Reuters report of April 25 quoted Gregoire Olivier, head of Asian operations for Peugeot, as saying: "We now have GM as a global partner, and GM has factories in India, so we're obviously reviewing our plans from the top." The statement raised questions against European car-maker's plan for India.
Peugeot's go slow strategy for its proposed Sanand facility in Gujarat also fuelled the speculation. Peugeot had in September 2011 announced an investment of Rs 4,000 crore (650 million Euro) in Gujarat by setting up an integrated manufacturing unit, engine and gearbox plant to manufacture cars in Sanand near Ahmedabad.
It has been allotted 600 acre for the plant with an initial capacity of 1.65 lakh units per annum with a provision for future expansion. A State Support Agreement ( SSA) to this effect was signed in Gandhinagar between the company and the state government.
In November last year, it had laid foundation stone for the factory. Commenting on proposal of the Central government to levy higher excise duty on diesel vehicles, officials of General Motors said a hike in the price of diesel would give government more revenue than increasing the excise duty on diesel vehicles by 5%.
P Balendran, general manager of GM India, told media persons that a study by Planning Commission had revealed that 5% excise duty will contribute Rs 2,500 crore, while a hike of one rupee per litre of diesel will add Rs 6,000 crore to the government kitty.
