Peugeot has launched the 307 hatchback in Brazil and expects to sell about 400 units per month, writes Rogerio Louro.

The French firm had originally planned to build the 307 in Argentina in place of the 306 to supply South American markets but has postponed the high investment in a new assembly line at the Palomar plant in Buenos Aires due to the economic crisis.

Instead, Peugeot has begun selling the French-built 307 with 110bhp 1.6-litre 16-valve petrol engine.

With the new 307 and growing sales of the Brazilian-built 206, Peugeot do Brasil expects to sell about 52,000 vehicles in 2002 - a rise of 56.% over of the 33.279 units sold last year.

Peugeot will launch the 307SW wagon in Brazil at the end of the year.