KOLIN, Czech Republic -- Toyota and PSA Peugeot Citroen will make more than 100,000 small cars this year at their joint new Czech factory, the companies said on Monday.
The plant at Kolin, 30 miles (50 kilometers) east of Prague, has churned out 11,000 Peugeot 107s, Citroen C1s and Toyota Aygos since starting operations in February, said Masatake Enomoto, president of the firms' joint venture TPCA.
The first cars will start reaching European dealing rooms this week, the companies said at a press day at the plant ahead of its official opening on Tuesday.
"We want to reach full capacity (of 300,000 units per year) at the beginning of 2006," Enomoto told a news conference.
The 1.3-billion-euro ($1.6 billion) project, including research costs, is the largest single greenfield investment into the Czech Republic since the end of Communism, showing the advantage manufacturers gain from setting up shop in low-cost eastern Europe.
This is in part thanks to low labor costs. The average worker's wage at the Kolin plant is 17,000 crowns (558 euros) per month, said TPCA Vice-President Jean-Pierre Chantossel, a fraction of wages in western Europe.
"In France the cost of living is very high. So if you divide the French salary by half or so, it is comparable," Chantossel told reporters.
A PSA spokesman said salaries started at 1,250 euros per month at PSA's French factories.
The price of the base model Citroen C1, the cheapest of the three brands, will start at 8,250 euros in France, a Citroen spokeswoman said.
The drive by west Europe companies to the east has angered many voters in the west where unemployment is high and new jobs scarce due to high taxes and labor costs.
The rise of low-cost competition from the east was one of the reasons cited for the sour mood in France that contributed to the rejection of the EU constitution in a referendum on Sunday.
The TPCA plant is expected to employ 3,000 workers when in full swing, and create around 7,000 further jobs at suppliers' plants.
The three models made at the new plant share over 90 percent of parts. Almost all output will be exported, significantly helping the Czech balance of payments.