Peugeot and Toyota Plan to Share Factory image

PSA Peugeot Citroen and Toyota plan to share vehicle production at a factory in northern France, declared President Nicolas Sarkozy in a newspaper interview.

The plant aimed for this partnership is the Sevelnord facility. President Nicolas Sarkozy didn’t mention if Toyota was the only potential Sevelnord partner in talks with Peugeot. This factory has 2,800 employees and manufactures Peugeot Expert, Citroen Jumpy and Fiat Scudo delivery vans. Since Fiat plans to withdraw from the venture in 2017, Peugeot needs another partner to take Fiat’s place.

“There’s nothing definitive with any new partner,” a Peugeot spokesman said on Wednesday, adding that the terms of Fiat’s withdrawal had yet to be finalized. Even if a new partner is found, the company still needs to make sure that the Sevelnord site is as competitive as possible alternatives.

The auto industry in Europe is fighting with excess capacity and cut-throat price competition, while overall demand sags under the weight of the debt crisis. All major car makers except Volkswagen lost money in the region last year. Peugeot and its partner GM are bracing for a fight with management as both car makers prepare to cut European capacity.