Hyderabad, February 26: Nearly two months after PSA Peugeot Citroen almost finalized its decision of setting shop in Andhra Pradesh, it now seems to be shying from investing in the State.
Sources said that Peugeot, France’s biggest car producer, is now scouting for a potential location in neighbouring Gujarat, which has reportedly offered huge cash incentives to Tata’s Nano project. Other than attractive incentives offered by the Gujarat govenment, ambiguity over a separate Telangana and political uncertainty in the state may compel Peugeot to decide against Hyderabad for its proposed `2,000 crore greenfield project, sources added.
“We are yet to hear from the company. They haven’t finalised either AP or any other state as the final location. We are in touch with them,” said Busi Sam Bob (IAS), principal secretary, Industries Commerce Department, Government of AP. He declined to comment on the incentives the company has sought from the state government apart from allotment of 900 acres of land.
When asked if Gujarat has an edge over AP in the automobile sector, J Geetha Reddy, Minister for Major Industries, Sugar, Commerce Export Promotion, expressed confidence about roping in Peugeot into AP. “We are assuring industries about business continuity. They are not worried about any uncertainty. There’s no violence in the state. Companies do shop for various locations before finalizing plans. We are quite sure, we’ll get the project,” she told Express.
Peugeot officials weren’t immediately available for a comment.
A team from Peugeot first visited AP in December, 2010 and later in January, 2011. Government sources had then indicated that the company has zeroed in on Sri City SEZ near Tirupati to set up an assembly and manufacturing facility. He also added Peugeot had sought specific incentives apart from the regular tax breaks that industrial units are entitled. They also met chief minister N Kiran Kumar Reddy and submitted a proposal in this regard.
Peugeot’s upcoming plant is expected to give a fillip to automobile manufacturing in AP. The facility is likely to encompass a dye manufacturing facility for car components, an R D team for design, bodybuilding shop, new technologies for a centralcontrolled room for regular functioning besides a testing unit.
The company had exited from the country in 1997 through Premier Auto Limited after a lockout at its Kalyan facility near Mumbai due to labour strike and subsequently financial crunch.
–Agencies