PSA Peugeot Citroen may build cars in India with GM

PSA Peugeot Citroen, the second-largest Europe-based automaker said on Tuesday it may build vehicles in India with General Motors, its new global partner.

“We’re not going to move forward by building our own factory as we’d planned to,” Gregoire Olivier, head of Asian operations said in an interview at the Beijing auto show.

“We now have GM as a global partner, and GM has factories in India, so we’re obviously reviewing our plans from the top,” he said.

Peugeot exited India in 1997 after the failure of an earlier joint venture, Premier Automobile Ltd., and had been seeking to re-enter the fast-growing market for at least two years before announcing the plant investment in Gujarat state last September.

In February last year Peugeot was re-entering India, after over a decade, but a grim financial situation precipitated by falling sales in its home market has compelled Peugeot to review its India plans.

Industry analysts, however, don’t see too much strategic sense in GM India making products for Peugeot as the two carmakers would end up competing head-on.