PSA/Peugeot-Citroen SA is exploring various entry routes into the Indian auto market but has not yet taken a decision, a spokesman for the carmaker said on Monday.
"We are currently assessing the opportunities offered by the India market and the way to enter this market, but we have not taken any decision yet,"
PSA's Laurent Cicolella said. The company is also assessing whether it should enter India on its own or with a partner and whether it should launch a compact car in the country.
The Financial Express reported on Monday that Europe's second-biggest carmaker was expected to tie-up with component manufacturer Caparo India, which builds body structures for the Tata Nano and is a wholly owned unit of UK's Caparo Group.
$323 million investment
The paper said PSA is looking at setting up a factory with a capacity of 6,000 units initially with an investment of around $323 million.
PSA plans to roll out mid-sized cars and hatchbacks in India by 2012, The Financial Express said. It was not clear whether the company would introduce the Peugeot brand first or its Citroen range.
PSA is looking at growth opportunities and has said it would consider acquisitions or partnerships to grow in markets where it hopes car sales will hold up.
China, Latin America and Russia are the carmaker's top three picks for international growth, Cicolella said.
In China, PSA has set up its second plant with partner DongFeng Motors, while it has two plants in Brazil and Argentina. In Russia, the company will start to assemble cars at its new plant in March 2010.
PSA had a joint venture with India's Premier Ltd to make the Peugeot 309 in India in the 1990s, but the venture failed.
India is a market that holds out hope for global automakers, with new-car sales rising fast compared with flat sales in mature markets such as Europe and the United States.
Earlier this month, Renault CEO Carlos Ghosn forecast the Indian car market to touch 2 million units in the current fiscal year, and triple in the next 10 years.
Reuters contributed to this report