Pal-Peugeot was incorporated on July 25, 1994. It was set up as a joint venture between Premier Automobiles (PAL) and Automobiles Peugeot of France to manufacture cars. The company was earlier known as Kalyan Motor Company; it became a public limited company with the present name on September 25, 1995.

Located at Kalyan near Mumbai, the plant was taken over by the company to manufacture Premier 118 NE (petrol) and 1.38 D (diesel) model passenger cars from PAL, and the Peugeot 309 model (petrol and diesel) passenger cars. While the land was transferred from PAL, technical know-how for the manufacture of diesel and petrol version of cars was supplied by the French partner.

In addition, the plant and machinery in terms of press shop, body shop, paint shop and other infrastructure were also transferred to the company by PAL.

The company has been suspended from the BSE for over three years on account of non-compliance with listing agreement clauses.