Peugeot may choose Chittoor to set up factory

There are indications that French car maker PSA Peugeot Citroen has chosen the Sri City Special Economic Zone near Tirupati in Andhra Pradesh for its assembly and manufacturing facility.

However, a formal announcement is yet to be made, either by the company or the state government. Company officials had a long meeting with Chief Minister N Kiran Kumar Reddy on Tuesday.

Government officials said the company was likely to invest about Rs 2,000 crore (Rs 20 billion) during the first phase of the project. In all, it could be Rs 7,000-10,000 crore (Rs 70 to 100 billion).

This was the second visit of the company's officials in two. They earlier surveyed a location in Rangareddy district, close to this city.

A large number of ancillary units are to come up in the vicinity of the car plant, if the proposal goes through.

The company had earlier sought many incentives, including an interest-free loan but the government asked for a revised proposal.

The facility in question is likely to have a dye manufacturing facility for car components, a research and development team for design, a body-building shop, new technologies for a centrally-controlled room for regular functioning and a testing unit.

The company had exited from a joint venture with Premier Auto Ltd after a lockout at its earlier facility near Mumbai.

This will be the second major project in Chittoor after the BHEL-NTPC joint venture to make power plant equipment.

The district is closer to the Krishnapatnam port in Nellore district for exports and also to Chennai port in Tamil Nadu.