American auto manufacturer Ford and French carmaker Peugeot have been given tax relief by the Gujarat state government to build their manufacturing units in the state. The tax relief is in two forms namely stamp duty and registration charges exemption. According to industry sources, both automakers will be offered the refund of Value Added Tax (VAT) for the next 15 years in addition to the exemptions. The two car manufacturers have also signed a state support agreement with the state government.
Ford India is planning an investment of Rs 5,000 crore in the state of Gujarat to set up a facility for manufacturing new car models and engines. The plant is supposed to be functional by 2014 and manufacture its first vehicle and engine.
Peugeot with similar plans had acquired the requisite land in the state in 2011 and announced its plans to achieve the full production capacity of 3,40,000 units by the year 2016. The integrated facility was also supposed to have a manufacturing facility for 1,00,000 engines.