General Motors is preparing to build future versions of the Peugeot 508 and Citroen C5 in Ruesselsheim, Germany. The report, first unveiled by Frankfurter Allgemeine Zeitung is citing union officials.
The move could utilize Opel’s Ruesselsheim plant after production of the Astra model has been shifted to the U.K. and Poland as planned.
But by shifting production of the two models from its Rennes plant in the western French region of Brittany, Peugeot Citroen (PSA) would likely need to close the factory, the paper added.
“One would need to close at least one factory per volume manufacturer in Europe, which would be about five factories in total,” said Philippe Houchois, a UBS analyst in London, referring to Renault SA (RNO), PSA Peugeot Citroen (UG), Fiat SpA (F) and Ford Motor Co. (F) as the other four companies needing to shut plants.
GM was not available for comments.
Jean-Luc Perrard, the head of Peugeot’s French plant in Rennes where the Peugeot 508 and Citroen C5 vehicles are built, had said in a French newspaper interview in May that Peugeot planned to halt production of the midsize C5 when its successor is transferred to a GM plant.
This comes after GM already announced to close its Bochum factory in Germany in 2016.
Peugeot and Citroën, the Group sold 3.5 million vehicles worldwide in 2011, out of which 42% outside Europe. As Europe’s second largest carmaker, it recorded sales and revenue of more than ?59.9 billion in 2011.
But year to date, the European auto market is down 7.7 percent. PSA sales? Down 15 percent. PSA’s market share fell more than a percentage point to 12.1 percent and firm’s stock lost nearly 24 percent of its value so far this year.