Peugeot says India factory plan may face delays

Feb 01, 2012 |

Reuters

Paris

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PSA Peugeot Citroen, Europe's second-biggest car maker, may delay a 650 million euro plant investment in India, the company said on Tuesday.

"PSA is reviewing the investment calendar for its India project," a spokesman for the group said. "This may lead to some timetable adjustments."

The spokesman declined to comment on the reasons for the review or whether PSA still aimed to begin production in 2014 as originally planned.

The French automaker, which in September announced the plans to build a factory in Gujarat, has issued a series of profit warnings amid plunging European sales. It is expected to report a significant full-year auto division loss on February 15.

Chief Executive Philippe Varin announced the India investment as part of a strategy to reduce the group's dependence on stagnating home markets.

The region accounted for about 54 per cent of PSA sales in 2011, the highest share among major automakers, according to data from LMC Automotive.

In October, Varin announced plans to save an additional 800 million euros this year and cut some 6,000 European jobs in an attempt to stem the expected losses.

The Peugeot division announced earlier this month it was withdrawing from Le Mans 24 Hours endurance racing ahead of the 2012 season as it seeks to 'concentrate resources on its sales performance'.

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