PARIS - Peugeot is slashing production of the 1007 just six months after its launch because sales for the premium-priced small minivan are far below expectations.
PSA/Peugeot-Citroen will cut 1007 production capacity at its Poissy plant near Paris to 70,000 units a year, far less than the 130,000 goal when Peugeot launched it April 18.
Additionally, PSA will lay off 550 temporary workers by year-end and move 150 workers to other jobs.
"One of the 1007's problems is pricing and the fact it is a new segment," a Peugeot spokesman said.
Georges Chetochine, an independent marketing consultant, said Peugeot was wrong to believe that one particular feature would attract buyers. Instead of regular doors for the driver and passenger, the 1007 has electrically operated doors that slide open.
"People don't buy doors, even sliding ones," he said.
The 1007's sales troubles echo those of its French rival, the Renault Modus. Renault's upmarket small minivan, launched in September 2004, also has been selling poorly. Renault has cut Modus production three times in 14 months. Modus output is 560 units a day, down from the 1,300 initially planned.
The low sales for the 1007 and Modus are a big blow to the French automakers who introduced the vehicles at the 2004 Paris auto show as trailblazing products. It highlights French brands' continued difficulty in selling small cars at a premium.
At launch, base models of the 1007 and Modus cost E13,000. That compares with E11,800 for Renault's new Clio and E9,000 for a Peugeot 107.
The 1007 and Modus also have failed to slow rivals' small SUVs. The first French SUVs arrive in 2007.