PSA Peugeot Citroen has broken ground at the site of its planned new car factory in Sanand, Gujarat state.

The engine and transmission plant will be constructed on 600 acres to which PSA will add a suppliers park. The planned investment is US$890m, providing up to 5,000 new jobs in the fast expanding automobile hub.

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Peugeot and Gujarat state plan an automotive skills development institute (ASDI) within the Sanand Automotive cluster.

On 1 November, Maruti India confirmed the purchase of land in District Mehsana, also in Gujarat state, “for future expansion of manufacturing facilities”.

Maruti had long been expected to start building an additional plant in Gujarat and recent industrial action at its exisiting plants in Manesar, Haryana state, had led to local speculation the automaker was reconsidering its investments in Haryana in favour of Gujarat.

Last month, Ford broke ground in Sanand for its second vehicle manufacturing complex in India.

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Peugeot may export from Indian plant