Peugeot Opens Third China Plant, Despite Europe Fall image

Although Peugeot’s situation in Europe is not too bright, the automaker has recently opened its third plant in China.

CEO Philippe Varin said that this new plant will bring the automaker a 5% market share in China by 2015. The facility was opened with Dongfeng Motor and among the four models that will be manufactured here are Peugeot 301 and Citroen C-Elysee. The plant is expected to increase Peugeot’s annual capacity to 750,000 units by 2016.

Although Peugeot continues to expand in China, the automaker still prepares to lay off thousands of employees and close a plant in its home market after it had reported losses of 576 million euro in 2012. In May auto sales in Europe have dropped to a 20-year low, although governments are desperately trying to find ways to revive the sluggish economy.

“China is probably the only way for PSA to get out of their difficulties in Europe,” said Klaus Paur, global head of automotive at industry researcher Ipsos in Shanghai.

Sales of Dongfeng Peugeot Citroen in China have jumped 33% to 276,896 units so far this year and the automaker plans to introduce 11 models in this market by 2015. During the first five months of the year the Chinese passenger-vehicle market has increased 15%.

Source: Bloomberg