Translated material
Nothing special
Peugeot-Citroen plans to produce Peugeot-307 and Citroen-C4 in Kaluga
French automaker PSA Peugeot-Citroen expects to participate in the division of one of the largest automobile markets in Europe - Russian. The concern intends to build a plant in Kaluga by 2010 worth 300 million euros.Yesterday, the French company signed an agreement with the government of the Kaluga region to begin construction of the plant in the summer of 2008. An area of 200 hectares will be allocated for Peugeot-Citroen, 50 hectares of which are intended to accommodate supplier companies. “The Russian automobile market has already surpassed the French one, and everything suggests that in a few years it will become the largest in Europe,” said Didier Alton, head of the PSA Russian project. It is planned that the initial production volume of the plant will be 75 thousand cars per year with a design capacity of 150 thousand units. According to Mr. Alton, the company will produce middle-class cars at the plant, “best suited for the Russian market.” “In any case, these will be mid-range models such as the Peugeot-307 and Citroen-C4,” he said. According to him, the company will not develop special models for the Russian market.
The head of the Ministry of Economic Development, Elvira Nabiullina, recalled that the investment agreement between the ministry and Peugeot-Citroen was signed back in June 2007. “We expect that in the near future the Kaluga region will become one of the largest automotive centers in Russia along with St. Petersburg, the Samara region and Tataria,” Interfax quotes her. According to the minister, in 2007 sales of new foreign cars in Russia increased by 61% compared to 2006 and amounted to 1.65 million units. The total volume of the passenger car market in Russia will reach 4 million vehicles by 2011. “We plan to satisfy such significant demand by producing high-quality cars in Russia,” Ms. Nabiullina emphasized. Therefore, according to her, projects for the construction of automobile factories are actively supported at the federal and regional levels and 23 investment agreements have already been signed on the production of cars in the “industrial assembly” mode, involving investments of $5.2 billion. In general, the amount of funds in the automotive industry for projects for the “industrial assembly” of cars and auto components, according to Ms. Nabiullina, will amount to $6.5 billion.
Peugeot-Citroen is already the third company that is creating car production in the Kaluga region, but the company plans to become one of the market leaders. “The Russian market, along with China, is a priority for Peugeot-Citroen, and we want to become a central player in this market,” said Mr. Alton. Previously, Volkswagen opened its plant in the region, and Volvo is building a plant there to produce trucks. According to the governor of the Kaluga region, Anatoly Artamonov, the region no longer plans to attract automakers, as this could disrupt “healthy competition” in the region.
Whether Peugeot-Citroen's ambitious plans will come true will largely depend on the likes and preferences of the Russian consumer, namely on how well the price-quality ratio meets his expectations. In Russia, Ford (in the Leningrad region) and Volkswagen (in Kaluga), Toyota (in St. Petersburg) currently have their own factories. Factories of General Motors, Nissan and Suzuki are already at the construction stage, and the South Korean auto giant Hyundai Motors Co. recently announced its desire to build a plant in the Leningrad region. Thus, Peugeot-Citroen is almost the last one on this list. “And the later a company launches a project, the riskier it is, because over time the market will become increasingly saturated,” notes Ilya Makarov from UBS.
Twelve South Korean companies producing auto components intend to create a technology park in the Leningrad region. As the head of the Korean delegation, the head of the Glovis company, said yesterday at a meeting with the vice-governor of the Leningrad region Grigory Dvas, investments in the project will amount to $217 million. With the commissioning of this facility, it is planned to create up to 1.2 thousand new jobs. The industrial park project will require a plot of land with an area of about 45 hectares, located near the Kamenka city industrial zone, where Hyundai Motor Co. is expected to build a car assembly plant. Regional authorities selected four sites in the Vsevolozhsky, Lomonosovsky and Gatchina (two sites) districts. More accommodation options could be offered if needed, Mr. Dwas said. During the negotiations, the parties discussed issues of construction of engineering infrastructure, as well as preferential taxation and the provision of preferences. “Companies producing auto components that are the first to come to the territory of the Leningrad region can become the main suppliers for the majority of automobile assembly enterprises operating and being built here, and have the right to count on capturing a significant share of the local market,” the vice-governor emphasized. Korean companies that took part in the meeting specialize in the production of the entire line of auto components - bodies, door frames, fuel tanks, mufflers, heating and ventilation systems, electrical wiring, seats, upholstery and interior parts. AK&M