Sources confirmed that PAL-Peugeot would begin assembly of the car, though in a small way, during the course of this week.

Ever since Automobiles Peugeot announced in November last year that it was withdrawing from its joint venture with Premier Automobiles, production of the 309 GLD came to a virtual standstill. Money was slow in coming and the company confined itself to manufacture of the 118NE and its diesel counterpart, the 1.38D, at the Kalyan plant. There are over 300 CKD (complete-knocked-down) kits of the 309 GLD at the warehouse but owing to the tight financial situation at PAL-Peugeot, these stocks could not be cleared. The last few weeks have, however, seen the situation improve marginally thanks to an inflow of revenue from painting the bodies of the Fiat Uno coupled with sale proceeds of the 118NE and1.38D.

"It is not as if PAL-Peugeot is flush with funds now but the management is doing its best to revive production of the 309 GLD. This way, the workers are also kept occupied," sources said. According to them, if some more funds come during the next few weeks, additional kits of the 309 GLD will be released from the warehouse. "Hopefully, the entire stock of the 300-and-odd CKD kits can be assembled at the plant in the months to come," sources said.

The 309 GLD was introduced in December 1996 soon after the lockout was lifted at PAL-Peugeot's Kalyan plant. The car, fitted with Peugeot's classy TUD5 engine, had everything going for it right from a reasonable price tag of Rs 7.20 lakhs to fuel-efficiency. The 309 GLD, with the advantage of a cheap fuel like diesel, was less expensive than the Opel Astra (petrol) and the 1.8 litre Ford Escort diesel.

The car, however, could not make much headway in the market because PAL-Peugeot began running out of CKD kits at the plant. The Director General ofForeign Trade refused to grant the company a fresh import licence as it had not met the export obligations stipulated in the memorandum of understanding signed in 1995. PAL-Peugeot's attempt to convince the authorities that this was impossible as the plant was closed for nearly five months during the lockout went in vain.

The 309 GLD suffered in the bargain and things did not improve when the joint venture partners got involved in a courtroom battle that eventually led to Peugeot calling it quits. The management has, since, been battling it out to keep production levels of the 118 NE and 1.38D going. Now, with the 309 GLD back in circulation, the next few months could translate into relatively better days for the company, feel sources.