PARIS -- PSA/Peugeot-Citroen and AllurGroup have signed an agreement to start complete knockdown production of the Peugeot 301 in Kazakhstan starting in 2016.
The Kazakh auto market has experienced strong growth in the past few years. The market is expected to reach 200,000 units next year, more than tripling from 45,000 units in 2011 to 166,000 units in 2013, PSA said.
Increasing production will help PSA to improve long-term profitability in Kazakhstan and the entire CIS region of former Soviet states, Christophe Bergerand, PSA's Eurasia head, said in a statement on Friday.
PSA will build cars from complete knockdown kits in Kostanay at the SaryarkaAvtoProm plant owned by AllurGroup. The first model to roll of the line in September 2016 will be a Peugeot 301, the brand's best-selling car in Kazakhstan.
Starting in 2017, average production volume will be about 12,000 vehicles a year with a possibility to extend to up to 17,000.
PSA and AllurGroup began cooperating in 2013 to produce and distribute Peugeot cars in Kazakhstan. In September 2013, AllurGroup subsidiary Argomash Holding began semi-knockdown kit (SKD) production of four Peugeot models -- the 301, 3008, 508 and Partner -- in Kostanay.
PSA sold 2.8 million vehicles worldwide in 2013, of which 42 percent were outside Europe.
Reuters contributed to this report