The history of Peugeot dates back to the early 1800s, with the France-based Peugeot familysetting up a milling business. In 1810, the family converted its grain mill into a steel foundry,which began supplying springs to the clock industry.Over the next few decades, the company soon diversified into producing coffee grinders, razorsfor hairdressers, sewing machines, roasting spits, clocks, garden furniture, bicycles, tricycles, andgramophones, through the company Les Fils de Peugeot Freres (LFdePF). In 1896, a newcompany, 'Automobiles Peugeot Company' (APC) was formed which began producing cars andtrucks. By 1913, it was credited with having produced half the cars in France. The initial modelsof the company included Type 15, Bebe Peugeot and Peugeot Lion. In 1910, LFdePF and APCwere merged to create Automobiles et Cycles Peugeot (ACP). In 1921, Peugeto acquired acarmaker De Dion Bouton. Five years later, ACP was separated into two companies, CyclesPeugeot and Societe des Automobiles Peugeot.In 1929, the Peugeot 201 was launched, becoming the first model whose name included a '0' for the second digit.
The next few decades saw the company expanding significantly on a globalscale. In 1974, Peugeot acquired 38.2% stake in Citroen,
with each company maintaining itsmodel range and sales network.Peugeot took over the management of the combined organization and shared operations such asresearch, purchasing and investments. In 1976, Citroen was merged with Peugeot. By 2001,Peugeot Citroen was present in over 142 countries (Refer Exhibit I) and had diversified into anautomotive equipment, transportation and finance businesses with sales of over 27,025 millioneuros. Peugeot's partner, PAL, was one of India's first automobile manufacturing companies,established in 1944 by the Walchand Hirachand family. The family owned many other businesses, including Hindustan Shipyard, Hindustan Aeronautics, Hindustan Construction,Rayalgaon Sugar and Walchandnagar Industries. In the early 1950s, PAL entered into a technicalagreement with the Italian automobile major Fiat for manufacturing Fiat 500 in India...
Despite the impressive 10,000 unit sales in its first year, Peugeot recorded a loss of Rs 920 million for the year 1995-96 (12 months). The company's problems could byand large be traced back to PAL's association with Fiat.
After having partnered Fiat in India for a significant time, PAL entered into a new technicalagreement to assemble the Fiat Uno at its Kurla plant and the technical agreement was changedinto a joint venture in 1997. The June 1996 production slowdown at the Kalyan plant had itsroots in the problems at PAL's Kurla plant where the workers had gone on strike over issuesrelated to wages, incentives and VRS. PAL was manufacturing the Premier Padmini and thePremier 118NE at the Kurla plant (later the Uno and Siena models as well) and the Peugeot 309