Peugeot Starts Scouting For New Indian Partner

French automobile major Automobiles Peugeot is set to begin searching for a new Indian partner. Peugeot's decision follow its overtures to its present partners, the Doshis, to buy out their stake in the joint venture, PAL-Peugeot.

Both sides hold a 31.7 per cent equity stake each in PAL-Peugeot, which has accumulated losses of Rs 92 crore since it commenced commercial operations about 15 months ago.

Senior officials in the French ministry of industrial strategy said the only way out for the troubled venture is for Peugeot to buy up the Doshis' stake and then offload it to another Indian partner as and when one is identified.

 

``Though this is a matter concerning the company itself, we feel it will become necessary to go for a new Indian partner following the problems with the present partner,'' said a senior official.

In fact, though there is no official line on this, the usually conservative French industry is watching the unfolding events on the Peugeot front closely, as the fate of the venture could also affect the other joint ventures that French companies are planning in India. ``We do not think it has sent out wrong signals, but the French companies will obviously be more careful in the light of these developments'', said officials.

The French ministry's comments follow a visit by Peugeot's India brass to Paris to discuss plans. The French car major has been seeking to increase the venture's capital base of around Rs 264 crore, by capitalising its losses of Rs 92 crore.