Report – PSA moves to outsource development in lower-cost Morocco image

According to people that have knowledge of the carmaker’s plans, PSA Peugeot Citroen is ready to inaugurate an engineering center in Morocco together with consulting firm Altran.

This would be the first major step undertaken by the French company’s new boss Carlos Tavares to position the second-largest automaker in Europe in countries with an affordable workforce. Tavares, which quit Renault – where he was No. 2, behind Carlos Ghosn – is taking a pace of the rival’s strategy, which has opened factories in the country to outsource production of its affordable Dacia brand.

Two sources that talked to Reuters under condition of anonymity, because the carmaker’s plans are not public yet, said the company would outsource some research and development functions to the new Altran location, which should create some 1,500 new jobs. They also added that Peugeot is now considering whether to also invest in building a low-cost vehicle assembly plant in the country.

The center would be located in Casablanca and would focus on computer-assisted design, modeling and technical documentation. A Moroccan research & development center could be a significant step for PSA in its quest to regain its former competitiveness, but the move could become politically sensitive if there are any impacts on French jobs. The carmaker has also announced it decided to cut down on its engineering workforce in the home country, and the Moroccan R&D could become unpopular with unions and even the French government – who now owns a decision-making stake in the automaker.

Via Reuters