PSA Peugeot Citroen today said it may make cars in alliance with General Motors, its new global partner, effectively scrapping a planned €650 million investment in its own factory, agency reports said today.

The companies would look at ways to use GM plants to support Peugeot's long awaited return to the Indian market, according to Gregoire Olivier, head of Asian operations for the Paris-based automaker, Reuters reported.

"We're not going to move forward by building our own factory as we'd planned to," Reuters quoted Olivier as saying in an interview at the Beijing auto show.

"We now have GM as a global partner, and GM has factories in India, so we're obviously reviewing our plans from the top," he said. "There are a lot of other ways to enter India now that they don't require us to put 600 million euros on the table."

Meanwhile, Lori Arpin, spokeswoman of GM, said without giving clarifications that the company had no plans to assemble cars for Peugeot in India.

The US carmaker through its Indian joint venture with China's Shanghai Automotive Industry Corp, sells models, including the Chevrolet Spark, Beat, Sail and seven-seater Enjoy. GM's manufacturing facilities are located near Mumbai and Halol, in Gujarat.