Its 300,000-unit Slovakia assembly plant wont open until mid-2006, but PSA / Peugeot- Citroen already plans to expand capacity at Trnava to 500,000 by 2009, supplier sources say.
Such capacity would create central Europes largest assembly plant, well ahead of regional powerhouses such as Volkswagen groups plants in Mlada Boleslav, Czech Republic, and Bratislava, Slovakia.
PSAs rapid expansion at Trnava is part of a huge automaker rush to establish plants in central Europe.
Between 2004 and 2010, automakers in Poland, Czech Republic, Slovakia, Hungary, Slovenia and Romania will add 1.6 million units of capacity, surging 72 percent to 3.8 million units from 2.2 million, according to CSM Worldwide and Global Insight (See chart, Page 22).
Suppliers that won Trnava contracts say they will supply parts for the Peugeot 207 small car when the plant opens in mid-2006. But major Tier 1 suppliers are already pitching for systems and modules development work on a vehicle program due when the plant is expanded. The suppliers declined to identify the project.
Were planning to open a new plant [closer to Trnava] for the work there, said one supplier based in the region.
Suppliers said the expansion project will start once the Trnava factory is fully operational in mid-2006. The additional capacity will come on line in 2009, they said.
PSA Trnava spokeswoman Zuzana Karhutova said that expansion plans are not true at the moment.
Alain Baldeyrou, director general of PSAs Trnava project, previously has said the French automaker provided for potential expansion, although he specified a maximum of 450,000 cars a year.
But PSA believes in large plants. Six of its existing assembly plants in France and Spain have capacities between 400,000 and 488,000, according to the AutoFacts division of consultants PricewaterhouseCoopers.
New capacity at Trnava could increase pressure to close PSAs UK plant in Ryton. The 180,000-capacity factory has no contract to build anything after production of the Peugeot 206 ends, although PSA says it will keep the plant open until 2010.
PSA is installing production equipment in the E700 million Trnava plant. It is on a 190-hectare site 40km northeast of Bratislava, about 250km southeast of its new Czech joint-venture plant with Toyota in Kolin.
PSA says when all three shifts are working at Trnava, initial capacity will be 300,000 cars annually. Engines and transmissions will be delivered to the factory from western Europe.
When it opens, the plant will have four halls and an administrative hub.
Construction plans will not be altered as a result of PSA expanding production to 500,000 cars annually, said a developer source. But he added that PSAs expansion will increase supplier demand for supplier park space.
Automakers are planning to open or expand 10 assembly plants in central Europe by 2010.
According to analysts at consultants CSM Worldwide and Global Insight, automakers will expand the regions annual production capacity by 1.6 million units to 3.8 million by 2010. Thats up 72 percent from 2.22 million units in 2004 in six countries: Poland, Czech Republic, Slovakia, Hungary, Slovenia and Romania.
But the percentage growth is even greater if three plants are subtracted – the two Romanian automakers Dacia and Daewoo Romania and Polands FSO. Romania is the only one of the six countries not already in the expanded European Union. FSO and Daewoo Romania face uncertain futures and have each been building about 30,000 units in plants designed for 200,000 or more units.
The other 13 plants had 1.66 million capacity last year, but are expected to grow by 86 percent to 3.09 million units by 2010.
In addition, these plants form a tight cluster in central Europe, with 11 of them within about 200km from a point near Brno in the central Czech Republic.