PSA Peugeot Citroen to invest $230m in Argentina

27 August 2008 23:28  [Source: ICIS news]

BUENOS AIRES (ICIS news)--The French group PSA Peugeot Citroen has a strong long-term investment plan in Argentina, a company source said on Wednesday.

The company will launch new car models during the next year and the beginning of 2010 for a total investment of $230m (€256m).

In addition, PSA Peugeot Citroen launched the production of C4 model with five doors in Argentina, which would be available next November.

The company hired 1500 employees for this production. At the same time, the firm assigned almost $100m to the production of the new car model and the expansion of its plant situated in the locality of El Palomar, in Buenos Aires province.

“This launching is part of the strategy of the company for the region, which seeks to accelerate its presence in the Southern Common Market, considered a priority area for PSA Peugeot Citroen,” according to a company statement in Spanish.

According to the firm, there will be a production of 22,000 C4 vehicles a year.

The 55% of the C4 production will be earmarked to exports.

Most of the production will be exported to South and Central American countries, mainly to the Brazilian market. The C4 will also be exported to Europe.

PSA Peugeot Citroen Argentina is the first automotive company in Argentina.

According to Argentina’s Automotive Manufacturers Association (ADEFA), Peugeot Citroën Argentina produced 78.264 units during January-July period over a total national production of 348.525 units.

As part of this move the Faurecia group, which is owned 71% by PSA Peugeot Citroen, will inaugurate for the end of 2008 a plant that will produce plastic car components, especially plastic dashboards and seats.

The plant will be located in Islas Malvinas, in the Buenos Aires province. This new opening involved an investment of $3m.

Faurecia has already a factory situated in Lanus, in the Buenos Aires province where it manufactures exhaust pipes.

This opening comes together with the new law approved by the Argentina Senate on past June, which seeks to stimulate the production of automotive components.

The new law grants a reimbursement of 8% on the whole of the automobile parts that the automotive plants acquired to the local manufacturers during the first year of application of the law, 7% the second year and 6% the third one. 

Automobiles are an important end market for chemicals and chemical-related materials such as engineering plastics, paints and coatings.

($1 = €0.68)

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By: Cristina Kroll
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