Peugeot and Fiat Make an Investment of 700 Million Euro in Van Venture image

PSA Peugeot Citroen and Fiat plan to make an investment of 700 million euro on new delivery vans in the following five years to reduce costs as both automakers are replacing aging models.

Peugeot will make an investment of 150 million euro, while Fiat will invest 550 million euro, to develop new versions of the Citron Jumper, Peugeot Boxer and Fiat Ducato models. The vehicles will be manufactured at the SevelSud plant in Italy. The cooperation agreement at the SevelSud JV plant last until 2019.

With the extension of the van partnership, “we are relaunching a bet together with Peugeot,” Fiat Chief Executive Officer Sergio Marchionne said today at an event at the factory in Val Di Sangro. “We have started the investment, including development costs for products and works to modernize the plant.”

Fiat and Peugeot are already assembling models at the SevelSud plant, and in May 2011 both automakers decided to end a similar partnership to build mid-sized delivery vans in France. Peugeot also plans to make an investment of around 750 million euro to develop a new vehicles on its owns at the SevelNord facility.

Marchionne said in order for Fiat to make further investments in Italian plants, which are underused due to low demand, the company will have reach reforms agreed by the government, the unions and the businesses.

Source: Bloomberg