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. Last Updated: 07/27/2016

Peugeot Plant Plans Face Uncertainty

PeugeotThe plant would produce Peugeot 307 cars, like the one above, but company spokesmen would not confirm plans.
Vedomosti said Thursday that French carmaker PSA Peugeot Citroen has decided to build a 200 million euro ($255 million) assembly plant in Russia because of booming demand for foreign cars, Vedomosti said Thursday.

A Peugeot spokesman, however, said the carmaker had not yet made a decision and that there was no target for how much the carmaker planned to spend.

Citing a government source, the newspaper said PSA would launch the plant in 2009 and would use it to assemble two models, the Citroen C4 and the Peugeot 307.

It said the Economic Development and Trade Ministry had already approved the investment plan, under which the firm would pay reduced import duty, and that the Industry and Energy Ministry and Federal Customs Service were likely to approve it soon.

Jean-Hugues Duban, a company spokesman, on Thursday said there were many "hypothetical" possibilities, adding that any production would be destined for the local market.

In June, a report in Kommersant said the firm was considering building a Russian plant capable of turning out 50,000 cars per year.

PSA declined to confirm the size of the investment or the plant's capacity, but said the plant under consideration would serve only the domestic market.

PSA has no production facilities in country yet.

(Reuters, Bloomberg)