GM and Peugeot Alliance: No Share in Capacity

Peugeot and GM formed an alliance some time ago to share platform technology and the two companies also decided to purchase car parts in joint venture. This alliance also had a point of shared production all over the world. But the GM’s president of international operations, Mr. Timothy E. Lee reported that the company’s Indian operations don’t have capacity to spare on Peugeot and looking into their future plans of GM, they won’t be able to provide any capacity to Peugeot for its production in India. this was a hint to the Peugeot from GM. The General Motors India has a future plan of taking up the Talegaon plant for its production of the upcoming vehicles, which is the same place where Peugeot was supposed to start its production locally in India.

The Talegaon plant has a manufacturing capacity of 1,40,000 units and is right now manufacturing Cheverolet Spark and Cheverolet Beat of GM. GM registered 79,000 units combined sales of these two hatchback last year. Taking the same figures in to the consideration for this year sales, GM will have a spare capacity of only 61,000 units for its upcoming three models: the Sail hatchback and the Sail saloon with other new product Enjoy MPV. These models will be produced from Talegaon plant only. While announcing about its decision to scrap the Rs. 4,500 crore investment plan in January for the production, the French car making company was planning to build its cars at the GM’s Indian facility. Peugeot is struggling to raise its investments in India as its cash is hooked up in the shared factory but now as GM is indicating about not sharing the capacity, this French automobile company has to re-think about its Indian plans and operations.

Source: Autocar