PRAGUE - A venture of PSA Peugeot Citroen and Toyota Motor Corp. will spend 750-950 million euros to build its new Czech small car plant and buy machinery for production, the Czech government said on Tuesday.
CzechInvest, the state-run agency for inward investment promotion, said the companies had officially completed the first stage of construction of their joint factory in the town of Kolin, about 60 km (37.28 miles) east of the Czech capital. In what CzechInvest dubbed the largest investment project in central Europe, Peugeot and Toyota are planning to pour a total of 1.5 billion euros into the factory, which will supply 300,000 small compact cars a year to the European market.
The total investment target had been announced earlier, but this was the first time the companies have given a more specific figure on how much they will spend on construction and machinery purchases. The rest of the money allocated for the project will mostly be spent on development, CzechInvest said.
The plant should be completed this year.
One-off imports of machinery by investors building or operating manufacturing plants in the Czech Republic have often hit the country's deficit-ridden foreign trade balance and have been watched closely by economists.
Investors in the foreign exchange market also are closely following news on investment plans by foreign manufacturers after heavy inflows of investment funds propelled the crown currency to record highs last year before the central bank pulled it back by market intervention and interest rate cuts.