PSA Group has started production of three-cylinder gasoline engines at its plant in Tychy, Poland -- a former General Motors Europe site that once made diesel engines for Opel and Vauxhall models.
The production shift, which came after PSA spent 250 million euros to retool the plant, helps meet a demand in Europe for efficient gasoline engines as consumers turn away from diesel. PSA had imported more than 100,000 such engines from China in recent years.
The Polish plant is projected to have an annual capacity of 460,000 of the 1.2-liter engines, which are designed internally as type EB and come in both turbocharged and naturally aspirated versions.
EB engines are also made at PSA's factories in Douvin and Tremary, France, and Xiangyang, China, in a joint venture with Dongfeng. Starting later this year they will be built at another former GM plant in Szentgotthard, Hungary; PSA's new plant in Kenitra, Morocco; and in 2020 at Hosur, India, in a joint venture with C.K. Birla.
The Tychy plant, built in the late 1990s, once produced four-cylinder diesel engines for Opel, Vauxhall and Chevrolet, and under GM employed about 500 people. Renovations under PSA included new equipment and information technology systems, as the automaker seeks to meet efficiency targets for its factories.
Under CEO Carlos Tavares, PSA had pushed to cut costs by 700 euros per vehicle by the end of 2018, and a similar reduction is part of the turnaround plan for Opel/Vauxhall, which PSA bought in 2017 from GM.
PSA is shifting Opel models from GM platforms and powertrains, and the Tychy facility was thought to be at risk after the sale. Last May the company announced that it would be doubling production of the EB engines at its French facilities and adapt the GM factories at Tychy and Szentgotthard to produce them, as part of a reallocation of powertrain production.
"The Tychy plant has a sustainable future now and will be a strong contributor to the Groupe PSA manufacturing footprint, organized to produce engines for our five brands," Tavares said in a news release on Thursday.