PSA Peugeot-Citroen will begin assembling its new 207 model at its Villaverde, Madrid factory in the first quarter of 2006, a trade union official told just-auto.

"The decision has been taken and we are going to work to prepare the plant for [the new 207]," Rogelio Hernandez, secretary general for Peugeot at Spanish union Comisiones Obreras CCOO said.

Hernandez was speaking on a day when many of his colleagues were attending a big protest against Renault Industrial Vehicles' decision to axe 500 workers from its truck factory in Villaverde. Hundreds were expected to attend a demonstration in front of the French and Swedish embassies in Madrid on Thursday afternoon.

Hernandez said the Villaverde plant, which makes Citroen's Xsara, C3 and C3 Pluriel models, could add an evening work shift to accommodate the new car, which is expected to replace the existing 206, launched in 1998.

The Villaverde plant has enough staff to build the new car, Hernandez added.

The factory makes about 600 cars daily "and we can build up to 900 if we need to," he said.

Villaverde produced 138,000 units in 2004, down 13.4% from 159,325 in 2003, Hernandez said. Xsara output soared 51.5% to 45,000 units.

Ivan Castano