Peugeot cuts production of the 208 because of weak demand in Europe image

PSA Peugeot-Citroen has announced it is cutting production of its 208 supermini because of slowing demand in Europe.

Peugeot is also reducing its sales outlook for the 208, according to a company spokesperson quoted by Automotive News Europe.

The Peugeot spokesperson didn’t offer specific details and could not confirm media reports that the French carmaker plans to sell 140,000 units of the 208 this year instead of the 175,000 units it had planned.

According to a report from the Wall Street Journal, Peugeot will cut the hourly production rate of the 208 at its Poissy plant to 35 from 52, starting October 10. The company will also cancel one of the plant’s three shifts at the end of November, most likely the night shift, as one representative from the CGT union told Automotive News Europe. The representative also said Peugeot plans to eliminate 850 temporary worker positions at Poissy by the end of the year.

Despite the drop in production, Peugeot still expects to have a share of 10 percent in the subcompact segment in Europe by the end of 2013, as overall industry volumes should be lower compared with forecasts from earlier this year.

In its first year on the market, 208 sales have been hit by the economic downturn. Peugeot launched the 208 in April and sold 74,487 units in Europe in the first eight months of the year. For 2013, Peugeot forecast global sales of 550,000 units of the 208, of which 420,000 units in Europe.