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Peugeot says 'no' to cars, scouts around for scooter JV

Automobile Peugeot of France has decided not to re-enter the Indian market with its range of cars, even as group company Peugeot Motorcycles is exploring the feasibility of setting up a joint venture in India to produce its premium scooters.

The company has, with regard to the scooter foray, already initiated talks with several leading players in the Indian scooter arena, including Hero Scooters and Monto Motors (owners of the Avanti brand name), senior officials in Peugeot Motorcycles said on the sidelines of the Frankfurt motor show.

However, the company is yet to shortlist its partner for the venture and the amount of investment proposed for India are yet to be finalised, the officials, on condition of anonymity, said. ''We are in the initial stages of dialogues with several companies. Once the suitable partner is identified, the modalities of the venture would be finalised."

The French major, the officials added, is open to the idea of either picking up a stake in the venture or merely licensing its brand and products to be manufactured by an Indian company.

Meanwhile, Automobile Peugeot's global spokesman Paul Alvarez, said India was a ''forgotten and buried market as far as Peugeot cars are concerned.'' ''We had a failed adventure in India and do not intend to venture back to the market having burnt our fingers there.''

Peugeot had entered India through a joint venture -- PAL-Peugeot Motors Limited -- with the Bombay-based Premier Automobiles Limited for producing its famed Peugeot 309 cars. The manufacturing unit for the cars was set up in Kalyan, Maharashtra and Peugeot controlled a 32 per cent stake in the venture. However, owing to difference between the partners, Peugeot later pulled out of India bag and baggage.

Having withdrawn from the venture, the French car major handed over the job of restructuring the JV to PAL. It further gave PAL the authority to finalise a bail-out package for the distressed venture. Peugeot had given the mandate to PAL to sell off the global car major's holding in the venture and hence has not come to India for any discussions. The company had, in fact, pulled out of India without resolving several key issues, which include outstanding to financial institutions, vendors and even booking advances.

ICICI, which has a substantial exposure in the company, has already filed a suit with the Bombay high court seeking relief.

Regarding the programme being chalked out for paying up the outstandings, Alvarez said, ''India and the Indian venture is history for us now and we do not want to have any association with the venture whatsoever. The matter is now being handled by PAL.''

PAL, on its part, had been making all-out efforts to sell off the Kalyan plant. It has, in this regard, initiated talks with three manufacturers -- Mahindra and Mahindra, Fiat Auto and Skoda Auto. However, all of them had refused to take over the company and the plant has been closed since.

UNI

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