French auto giant PSA Peugeot Citroen is to invest nearly $890 million to set up a factory in the western state of Gujarat for its re-entry into the Indian car market, a report said on Wednesday. The financial daily Mint said that the company would spend an estimated 40 billion rupees on a 121-hectare (300-acre) production facility at Sanand, where India's Tata Motors builds the world's cheapest car, the Nano.
In July, US car manufacturer Ford said it would invest $1 billion to build an assembly and engine plant in Sanand, 40 kilometres (25 miles) from the Gujarat state capital, Ahmedabad. India's Maruti Suzuki has also been linked with a move to Sanand, as domestic and international auto makers seek to exploit the country's burgeoning car market. Mint quoted three unnamed Gujarat state government officials and two Peugeot officials as confirming the development. A formal announcement would be made on Thursday, the newspaper added.