PSA, Toyota Launch Small-Car Factory In Czech Republic

By Agence France-Presse Carmakers PSA Peugeot Citroen of France and Toyota of Japan began construction April 10 of a joint small-car factory in the Czech Republic, a market the partners believe is growing at full steam. The agreement between PSA and Toyota aims at developing and producing entry-level cars to be sold at less than 8,000 euros (US$7,035), cheaper than the small models currently sold by the two groups. The two partners have invested a combined total of 1.5 billion euros in the project. "It is not exaggerated to say that the success of this project is the key to Toyota's future success in Europe," Toyota head Fujio Cho said at a groundbreaking ceremony, attended by PSA CEO Jean-Martin Folz and Czech Prime Minister Milos Zeman, a native of Kolin. The Czech-made cars will have bodies specifically designed for each of the three brands -- Peugeot, Citroen and Toyota -- but will be equipped with the same mechanical elements: diesel motors from PSA's French factory and gasoline motors from Toyota's factory in Poland. The common platform of the small four-seater cars could be used in other PSA vehicles, but not in Europe, Folz said. The factory, located in the future industrial zone of Kolin-Ovcary, 37 miles east of Prague, is due to begin operations in 2005. The plant will have an annual production capacity of 300,000 cars, of which 200,000 will be made for PSA, and will have a workforce of about 3,000. The definitive Kolin models will be unveiled in 2004, before entering the market in 2005, Cho said. The two groups see a small-car market in Europe of 1.2 million vehicles in 2005, in a total market of 17 million cars, Folz said. Copyright Agence France-Presse, 2002