French carmaker Peugeot says no plan for swift return to India

PSA Peugeot Citroen has no plans to re-enter India's car market any time soon, a company spokesman told Reuters, after an Indian newspaper reported that the French carmaker is in talks with Tata Motors to form a local partnership.

The tie-up between Peugeot and Tata Motors could include the Indian company producing and distributing the French carmakers' vehicles in the country, the Economic Times reported, quoting several people close to the development.

The two firms may also share engine technology and vehicle platforms, the report said, without specifying a timeline for Peugeot's entry.

"To date, there is no decision taken regarding a swift return to India," a Peugeot spokesman said.

"In 2014, Peugeot created a regions based organisation. The fact that 'India Pacific' is among those regions show the importance of the Indian market for Peugeot," he said, adding that the company would not comment on any speculation.

A Tata Motors spokeswoman said that while the company may pursue several initiatives at any time, "we do not have any specific announcement at present on this." In 2011, Peugeot planned to re-enter India after exiting the market nearly two decades ago.

At the time, Peugeot said it would invest around 650 million euros ($730 million) to build a new manufacturing plant in western India, with an initial production capacity of 170,000 vehicles per year.

A slowdown in Europe, which brought Peugeot to the brink of collapse in late 2012, forced it to put its India plan on hold.

Tata Motors shares ended the day 6 per cent higher at 315.15 rupees in a market that rose more than 2 per cent. ($1 = 0.8903 euros)