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The persistent loses being faced by PSA Peugeot Citroën, are resulting in change of every plan of the French carmaker. In the previous financial year the company reported a loss of Rs. 3,000 crore and expects a further drop of sales in the European markets. Just a few weeks earlier, the company had announced an investment of Rs. 4,000 crore for setting up of a green field facility in India. But, thanks to the huge financial hit, the company scrapped the whole plan and is now making fresh strategies for the country. At the same time, the company will go ahead with the launch of one of its premium models. Though the launch was planned for 2013 year end, the schedule will be revised.

The Indian market is definitely a strategic one for the company as it fits well into the mid-term international development of the brand. Thus, the timing might be rescheduled but plans will be put into action. There were plans to set up an automotive and engine/gearbox plant in Sanand, Gujarat, across 600 acres of land. This facility could provide employment to more than 5,000 skilled workers. Within the premises, the company had planned to set up an automotive skills development institute. Only, time will tell if this will take a shape. However, the company was in talks with potential investors to set up dealerships across the country.

The company wanted to start the local production, but again that would mean a good high amount of investment. Thus, they tried to vouch for the General Motors production plants in India. However, little interest was shown from General Motors’ end and the venture ended even before getting started. But the GM-PSA alliance will work in the European markets. The GM-PSA alliance is considered to be an important partnership by GM and is expected to have long term benefits for both. The financial crunch is taking the company on different routes and not sure if they are on right track, the company is unable to stand for any of its plans.

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Source – Business Standard