PSA/Peugeot-Citroen and Mitsubishi will temporarily close their joint venture plant in Russia as the country’s worsening economic situation hits vehicle sales.
The factory in Kaluga, 180km southwest of Moscow, will stop production Monday for two weeks, a PSA spokeswoman told Automotive News Europe. “It has been planned for a long time and announced in December to the employees,” she said.
PSA assembles the Citroen C4 and Peugeot 408 cars in Kaluga. Mitsibushi produces the Outlander and Pajero Sport SUVs at the plant. All vehicles are manufactured from knockdown kits.
PSA's vehicle sales in Russia plunged 75 percent in January to 898 vehicles, according to data from the the Moscow-based Association of European Businesses.
Mitsubishi was hit less hard as the weak yen is helping Japanese automakers keep prices down. Its sales fell 36 percent to 3,220. Overall, the Russian market was down by 24 percent.
PSA and Mitsubishi opened the Kaluga plant in mid-2012 at a time when Russia was tipped to pass Germany to become Europe’s No. 1 market by sales. The factory has an annual capacity of 125,000 but built just 28,100 units in 2013, its first full year of production. Of those, 21,800 were Peugeots and and 6,300 were Mitsubishi models, according to data from the automakers.
General Motors and Renault are among automakers that have suspended production in Russia as the decline of the ruble and the struggling economy hits car sales.
Bruce Gain contributed to this report