PSA mulls closing lines at 2 French plants

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PARIS (Reuters) -- PSA/Peugeot-Citroen is set to decide early in the new year whether to close assembly lines at two French car factories.

The automaker plans to launch a study to help it decide whether to close assembly lines at its Mulhouse plant in eastern France and its Poissy site near Paris.

PSA builds the Citroen C4 and Citroen DS4 compact models and the Peugeot 2008 subcompact crossover in Mulhouse. The Citroen C3 and DS3 and the Peugeot 208 subcompacts are built in Poissy.

"We are launching an internal study in the next few weeks with a likely outcome in the first quarter of 2014," a PSA spokesman said on Saturday.

The carmaker said last month it would review the second of two production lines at both Mulhouse and Poissy, although the Poissy line was less likely to be shut.

The carmaker has already closed its plant in Aulnay near Paris as it struggles with excess capacity during a slump in European auto sales. It has been preparing the ground for further politically sensitive cutbacks.

CEO Philippe Varin said in September that production line shutdowns were under consideration, while PSA would avoid site closures. He told unions that Mulhouse and Poissy could be affected.

The company has forecast annual production of 190,000 to 230,000 vehicles in Mulhouse in the coming years, well below its own threshold for keeping two lines open, but a healthier 240,000 to 270,000 at the Poissy plant.

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