PSA/Peugeot-Citroen is investing 300 million € in a Russian assembly plant for its mid-size models as part of plans to sell 100,000 cars by 2010.
Russia is expected to outstrip Germany as Europe’s biggest car market in a few years and is a priority growth area for the French company.
The plant at Kaluga, 180km southwest of Moscow, will have a capacity for 150,000 cars per year from 2010. Construction will start by June 2008, the company said at a signing ceremony today.
A company spokesman said it was possible another firm (Mitsubishi?) would join the project and a decision could be made in the first half of 2008.
PSA Peugeot Citroen has a pact with Mitsubishi for sports utility vehicles, makes engines with Ford and BMW, makes commercial vehicles with Fiat and produces small passenger cars with Toyota Motor.
The Russian market, along with China, is a priority market for Peugeot-Citroen which wants to become a key player in this market
PSA said in December it had selected Kaluga as the site over Nizhny Novgorod.
PSA said in December it had selected Kaluga as the site over Nizhny Novgorod.
PSA aims to sell 300,000 cars in Russia eventually.
The new plant will make its mid-sized vehicles, which currently include the Peugeot 307 or Citroen C4 cars. Mid-sized vehicles make up 60 percent of the Russian market.
Russia’s Economy Minister Elvira Nabiullina said during the ceremony the government expects annual car sales in Russian will reach 4 million units by 2011.
In 2007, foreign car sales rose by 61 percent from 2006 to 1.65 million units.