European auto major PSA Group on Tuesday announced a partnership with the CK Birla group to re-enter the Indian market and earmarked an initial investment of 100 million euros (around Rs700 crore) to set up vehicle and powertrain manufacturing in Tamil Nadu. The tie-up entails two joint-venture agreements between the companies of the two groups.
“As part of the first agreement, the PSA Group will hold a majority stake in the joint-venture company being set-up with HMFCl (Hindustan Motor Finance Corporation ltd) for the assembly and distribution of PSA passenger cars in India,” the two firms said in a joint statement.
Under a second agreement, a 50:50 joint-venture is being set-up between the PSA Group and AVTEC ltd for manufacture and supply of powertrains. “The manufacturing sites for both vehicle assembly and powertrains will be based in the state of Tamil Nadu,” it added.