PARIS – PSA/Peugeot-Citroen may export cars from Argentina to Europe, CEO Jean-Martin Folz said.
The French carmaker plans to export cars from its plant in Palomar, a suburb of Buenos Aires, to South Africa, Folz said during a visit to Argentina. In the longer term, the Palomar plant might build cars for Europe, he added.
Folz said Argentina has become an interesting production base because of the “very significant” progress the plant has made in improving its productivity and because the devaluation of the Argentinian peso three years ago has made exporting more attractive.
“Argentina is very clearly slated to become an export base” for PSA, Folz said.
Room to grow
European automakers have spare capacity at their South American plants. The new-car market in Brazil and Argentina collapsed at the start of the decade because of overcapacity plus economic and political troubles.
PSA would be the second European carmaker after the Volkswagen group to use South America as a low-cost production base for exports.
Last month VW began European sales of its Fox minicar, which it produces in Curitiba, Brazil.
Renault is considering exporting cars to Europe from its plant in Curitiba.
PSA’s Palomar plant builds the Peugeot 206 small-segment car, the lower-medium Peugeot 307, plus the Citroen Berlingo and Peugeot Partner car-derived vans. PSA will add the Citroen C4 lower-medium model to the factory’s lineup next year, a move than will help double the plant’s production to 100,000 units a year by the end of 2007.
Exporting from Palomar to Europe would suggest a change in policy by PSA. Only a few months ago, Folz said there was no business case for exporting cars from one continent to another, except on a one-off basis.
“Production must be regional,” he told French journalists in January. “Latin American plants feed Latin America, Chinese plants feed China.”
PSA spokesman Hugues Dufour said Folz’s comments were not a policy shift.
“It is more a question of us seizing an opportunity than a long-term strategy,” he said.
Four years ago PSA exported the Berlingo from Palomar to Europe when its plant in Vigo, Spain, ran out of capacity.