Peugeot and Mitsubishi tie-up for green field plant in Russia
PSA Peugeot Citroen and Mitsubishi Motors are entering into partnership to develop a green field plant in Russia. The plant will be commissioned in 2011 for production of cars and sport utility vehicles. Russia is turning into a big prospective market for the global car makers. The tilt towards Russia is caused by the dampening sales in America and flat markets in Western Europe. The plant is coming up at Kaluga, south-west of Moscow. Volswagen already has a car plant over here and the truck manufacturer Volvo is building one in the near vicinity. Peugeot will invest 70% €300m ($465m) in the joint venture and Mitsubishi will take balance 30%.
The joint venture is bringing two giants further closer to each other into world’s fastest-growing car markets. Mitsubishi has been already producing the Peugeot 4007 and Citroën C crossover in Japan.
Christian Streiff, Peugeot’s chief executive described the joint venture as exchange of technology and know-how. He informed that of 160,000 vehicles 33% would be the mid-range four-wheel-drive vehicles that the new Russian plant will initially produce.
The remaining production will include Peugeot 308 and Citroën C4 ranges. Plant’s capacity would be enhanced to 300,000 vehicles in the second phase. Mr Streiff states that joint venture partners are initially targeting Russian market share of 5-6% which could rise to 7-8% in the second phase of expansion. Russia is an important priority market for Peugeot, while France continues to enjoy first priority.
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