PARIS - PSA Peugeot Citroen said on Thursday it would invest 50 million euros ($53.72 million) to start making its top-selling Peugeot 307 car in Argentina from next year.
The firm would make 16,000 cars at its factory in Buenos Aires in its first year of operation, marking the introduction of its new mid-range car platform in Argentina.
Some 60 percent of cars made would be sold in Latin America.
"This investment decision confirms the long term strategy of the group in Latin America, as well as its commitment to sustaining its business despite the difficult economic environment," the group said in a statement.
PSA Chairman Jean-Martin Folz told a news conference in Buenos Aires the decision to make more cars in Argentina also was driven by the devaluation of the currency in January 2002, which made it cheaper for companies to produce goods there.
"Obviously the currency developments play a major role (in the investment decision)." "We will buy as many spare parts as possible in Argentina and Mercosur," Folz said.
The Argentine government has forecast the country will produce some 110,000 autos this year.
PSA said in 2002 its Buenos Aires plant produced 17,800 vehicles, adding it edged its market share in Argentina up to 18 percent in 2002, while the market tanked 53 percent amid economic strife.