Ahmedabad PSA Peugeot Citroën, France’s largest carmaker and Europe’s second largest, will invest R4,000 crore to build a factory at Sanand near Ahmedabad for 1,65,000 cars yearly and creating 5,000 direct jobs. The integrated manufacturing plant, which will come up in 600 acre, will roll out its first Peugeot car in 2014, over a decade after the company left India following a bitter parting with its former partner Premier Automobiles. The Peugeot deal is a thumping victory for Gujarat, which aims to become the automobile hub. The state — which already hosts Tata Motors, Ford and General Motors — managed to lure the company after Tamil Nadu jumped the gun in June with an announcement that it had won the deal, which was quickly denied by Peugeot. Peugeot will be the third auto giant to build a plant in Sanand. Tata Motors already has its Nano plant there, while Ford Motor on July 26 said it will set up a R4,000-crore integrated car plant there. Adding GM’s plant in Halol and Asia Motor Works’ unit in Bhuj, Gujarat is now in a position to challenge Tamil Nadu, Maharashtra and Haryana, who are wooing carmakers. Sources said it was chief minister Narendra Modi’s core team that played a crucial role in luring Peugeot away from the southern embrace. When the Tatas were driven out of Singur, Modi had seized the opportunity by offering land for the plant, which was set up in record time. On Thursday, Modi once again managed a coup of sorts when he presided over a ceremony to mark the signing of a state support agreement with Philippe Varin, chairman of the managing board of PSA Peugeot Citroën, officially pipping Tamil Nadu to the post. As per the agreement, Peugeot will build a cutting-edge integrated manufacturing facility which can make 1,65,000 units a year, with options for further expansion. There will also be an engine and gearbox plant which will employ the latest and power train technologies, which the group is reputed for. Apart from the 5,000 direct jobs the plant will create, an extensive adjacent supplier park providing parts and services will also benefit in terms of business and employment. The Gujarat CM assured fast-track project implementation support for Peugeot. The Peugeot chairman said: “We are proud to announce this new milestone in Peugeot’s continued global expansion and to have chosen to grow our Indian roots in the State of Gujarat. We view India as one of the most important and dynamic markets in the world, with forecasts of it becoming the third largest automotive market by 2020. Gujarat offers a proactive business-friendly environment, excellent infrastructure and is geographically well-positioned to cater to passenger car markets across India”. The intention to create an Automotive Skills Development Institute (ASDI) in partnership with the Government of Gujarat has also been announced. Varin maintained that India was a key priority Peugeot. “This investment emphasises the brand’s long term vision to offer its customers and dealers a wide range of products progressively introduced and well adapted to the market.” Peugeot will strengthen its identity and its “MOTION & EMOTION” signature while launching a carefully targeted set of models which are adapted to Indian market needs and tastes. PSA Peugeot Citroën Group, which employed 2,05,000 in 2010 had sales of 56.1 billion euros in 2010. It is also the leader in the European LCV market. Over the first half of the year, Peugeot sales outside Europe strongly increased especially in Asia (+18%), Russia (+58%) and Latin America (+19%).