Groupe PSA-CK Birla Group JV firm performs ground-breaking ceremony

PSA-AVTEC Powertrain Pvt Ltd, a 50:50 joint-venture between French automobile major Groupe PSA, which makes Peugeot and Citroen cars, and CK Birla Group's power-train manufacturing firm AVTEC, has marked its inception with the ground breaking ceremony of its new plant in Hosur, Tamil Nadu to focus on manufacturing and supply of power-trains. 

The manufacturing plant is expected to be operational by early 2019.

The plant will have an initial manufacturing capacity at about 200,000 units per year, and would see further investments to support a progressive ramp-up of the long-term project. It had been reported earlier that the two partners will invest around Rs 700 crore in the facility by 2020.

It may be noted that the state government has been raising the commitment from Groupe PSA as an example of Tamil Nadu's ability to attract investments, against speculation that the State is losing its sheen as an industry friendly destination.

The plant will be engaged in the manufacturing of next generation gearboxes and engines. The manufacturing capacity for power-trains will cater to the domestic market needs and global OEMs. The performance of the industrial set-up will be supported by a significant level of localisation, in order to reach the necessary cost competitiveness, said a company announcement.

Emmanuel Delay, executive vice president, India & Pacific, Groupe PSA, said "The ground-breaking ceremony is a key milestone in the deployment of our strategic plan Push to Pass and it reiterates the commitment of Groupe PSA to India. With the support of our Indian JV partner AVTEC, we are confident of meeting the requirements of our customers by providing them best-in-class products driven by latest technology and manufacturing practices."

Prabhakar Kadapa, CEO & MD, AVTEC Ltd., said that the company is committed to delivering an array of advanced products and setting global benchmarks in reliability and efficiency through this partnership that will help it tap into the huge potential of the Indian automotive industry.

The joint venture, which will bring together the Groupe PSA's state-of-the-art technology and the CK Birla Group's engineering and manufacturing expertise was announced in January, this year. Hindustan Motors, part of CK Birla Group has a facility at Tiruvallur, a suburb of the city, where Mitsubishi's Pajero Sport has been manufactured and this is the location where the JV will have its facility, said officials from Tamil Nadu government recently.

It has been reported earlier that of the total investment, two-thirds will come from PSA and the rest from the CK Birla Group. PSA announced its India comeback in 2011 but put this on hold with the global financial problem. It had initially entered the Indian market through a partnership with Premier Automobiles; this had ended in the late 1990s. The Group has five car brands, Peugeot, Citro