MUMBAI, November 21: Peugeot of France, which fought a bitter battle with its partner Premier Automobiles, today announced in Paris that it is getting out of the joint venture by selling its stake in PAL-Peugeot Ltd.It also signed an out-of-court settlement in Paris, thus ending a long drawn legal proceedings against its partner. The Mumbai High court was informed of this development on Friday and the suit filed by the French auto maker has been withdrawn.The settlement was inked by Premier Automobiles' managing director, Maitraye Doshi and Automobile Peugeot chief of India operations, Yves Barbe on Friday. Peugeot had filed a case against Premier as it was going ahead with another joint venture with multinational Fiat.A report from Paris says that Peugeot has announced its intentions to withdraw from its joint venture in India - PAL-Peugeot Ltd. Peugeot is also offering to sell its share to its partner Premier Automobiles.According to the report, Peugeot would continue to provide technical assistance and parts for the Peugeot 306 sedans produced by the joint venture.Surprised PAL officials here say that Peugeot's withdrawal from the joint venture was never on the agenda during the out-of-court settlements. ``We are surprised by what has happened. only Doshi can throw light on this,'' a Premier spokesman added.Both Premier and Peugeot held 32 per cent each in the loss-making joint venture, set up in 1994. The rest of the stake is with the individual shareholders. Premier itself had in recent months been trying to leave the joint venture, hoping to sell its stake to the French automaker before developing a joint venture with Fiat of Italy.With today's development, the company will be not be able to concentrate on the new joint venture with Fiat of Italy, officials say.Off late, Peugeot was also facing tough competition in its own home turf in the Europe. Peugeot sources here say that Renault of France was in talks with them to pick up the stake in the PAL-Peugeot. With today's developments, Peugeot officials say that their talks with Renault has broken down, though a confirmation is awaited.Peugeot's entry into India was jixed since the day one. The company bought an outdated auto plant from Premier in 1993 and within a few months faced an crippling labour strike. The company never made profits and accumulated huge losses.To make matter worse, in 1994, PAL decided to enter into a technical collaboration with Fiat for assembling the `Uno' model at its Kurla plant in Mumbai. This led to a legal fracas.Peugeot wrote to PAL in November 1994 giving its go ahead to the project subject to certain conditions. One was the Uno would be assembled under a license, a CKD (completely knocked down) and engineering agreement and ``shall not include a joint venture agreement.''Taking few factors into consideration, the French automaker stated that the Fiat project did not enter in competition and would not be detrimental to the PAL-Peugeot joint venture.In January this year, Peugeot wrote to PAL seeking confirmation of news on Fiat picking up a stake in PAL and the proposed `Palio' project between the two parties. PAL replied that the `Palio' project was a joint venture company between Fiat Auto and the Doshi family.
