PSA begins full-scale Russian production of Peugeot 408
PARIS -- PSA/Peugeot-Citroen has begun full-scale production of the Peugeot 408 sedan in Kaluga, Russia at its joint venture plant with Mitsubishi Motors as the French automaker seeks to meet local demand in one of its fastest-growing overseas markets.
PSA and Mitsubishi have invested 550 million euros to raise the plant's annual annual capacity to 125,000 units, 85,000 of which will be PSA models. Both automakers say Russia is one of the key regions for their long-term business development.
PSA owns a 70 percent stake and Mitsubishi a 30 percent stake in the joint venture plant, which has built 99,000 cars and SUVs since it began production in 2010.
The Kaluga plant produces the Peugeot 308, Peugeot 4007, Citroen C4, Citroen C-Crosser and the Mitsubishi Outlander.
Production of an all-new Outlander will begin in November, to be followed later by further Citroen models, the automaker said.
Thierry Peugeot, PSA chairman, said that local production in Russia is essential to meet demand in the market. "The capacity increase at Kaluga will allow us to increase significantly the production volume in the Russian market and strengthen the positions of our brands," Peugeot said. "It reinforces PSA's globalization strategy."
PSA said its car sales in Russia increased 35 percent in 2011 and 25 percent in the first quarter of this year compared to the same period in 2010.
PSA's dealership network currently covers 90 percent of the market, the company said.
Sales of Mitsubishi vehicles in Russia increased 63 percent last year.
You can reach Bruce Gain at firstname.lastname@example.org.