PSA Refuses to Comment on Algerian Investment Rumors image

PSA Peugeot-Citroen refused to comment on the report regarding Algeria’s investment in the automaker.

A PSA Peugeot-Citroen spokesman said that the company has not announced any plans to start manufacturing vehicles in Algeria and said that the La Tribune’s report, published on Wednesday, December 12th, was ‘based on rumors and we do not comment on rumors,” although the information was confirmed by a diplomatic source.

According to the source the Algerian government is currently in talks with PSA Peugeot Citroen officials for an investment in the struggling automaker. The official announcement might be made next week during President Francois Hollande’s visit to Algeria.

Last month PSA had to accept the French government’s subsidies, to stem losses of almost 200 million euro a month. The company has also implemented a restructuring plan, which includes cutting almost 10,000 jobs, closing a plant in France and sell 1.5 billion euro of its assets. PSA also tries to expand in emerging markets as it looks to become less dependent on Europe. During the first ten months of the year, the automaker’s sales dropped 12.2% to 1.27 million in Europe.

In May Renault and Algeria signed an agreement to manufacture a new plant in the north African country, but misunderstandings have risen concerning the location of the plant. Renault said it would prefer a site in the suburbs of Algieria, which would mean fewer struggles to find qualified workers near the capital.