Logistics considerations are behind PSA Peugeot-Citroën’s decision to build a new mid-range vehicle for emerging markets at its Vigo plant in north-western Spain.
The plant is located near the port of Vigo and will ease shipments to developing markets according to the company. The move is part of its strategy of reducing dependence on the mature European market.
The Vigo plant produced just under 385,000 vehicles last year and currently makes the Citroën C4 Picasso, Grand C4 Picasso, Xsara Picasso, Berlingo First, New Berlingo, Peugeot Partner Origin and New Partner.
The new vehicle, which PSA said will mean an investment of around €1 billion ($1.22 billion) over the next five years at the Vigo plant, has been designed to meet demand in developing countries. It will be made in both Citroën and Peugeot versions and initially will be marketed in the Mediterranean Basin, the Middle East and Africa.
"Vigo is just the first step in this global programme; the next stage will be Asia and then Latin America," CEO Philippe Varin told Dow Jones Newswires.
Towards its plans for a global programme in emerging markets PSA announced the creation of a new Industrial Operations Department at the end of May. It will be headed by Denis Martin and will handle the company’s global supply chain as well as manufacturing operations and industrial relations in Europe.