Peugeot opens third plant in China
Chief executive Philippe Varin, who flew in for the opening ceremony in Wuhan, Hubei province, said the plant would help the firm capture 5 per cent of the mainland market by 2015.
PSA Peugeot Citroen, the unprofitable French carmaker, opened a third assembly plant in China, expanding in the world's largest vehicle market even as a slump in European demand prompts it to cut jobs at home.
Chief executive Philippe Varin, who flew in for the opening ceremony in Wuhan, Hubei province, said the plant would help the firm capture 5 per cent of the mainland market by 2015.
The Citroen C-Elysee and Peugeot 301 would be among four models produced at the factory - opened with Wuhan-based Dongfeng Motor - which would increase Peugeot's annual capacity by two-thirds to 750,000 units by the end of 2015, it said.
The Paris-based carmaker, which produced 40 per cent of its vehicles in France last year, reported a €576 million (HK$5.8 billion) operating loss for the period and has started implementing a restructuring plan that includes closing a factory on the outskirts of the capital and eliminating 11,200 positions in the country.
"China is probably the only way for PSA to get out of their difficulties in Europe," said Klaus Paur, the global head of automotive at industry researcher Ipsos in Shanghai. Peugeot's reliance on Europe had "amplified" its problems, he said.
European car sales fell to a 20-year low in May as record joblessness caused by a recession in the euro zone reduced demand at Peugeot, Renault, Fiat and General Motors. Political leaders are seeking ways to revive the shrinking economy, with unemployment in the region reaching a record 12.2 per cent in April.
