Peugeot 208 production has begun at an expanded PSA Porto Real factory in Brazil

Peugeot 208 production has begun at an expanded PSA Porto Real factory in Brazil

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The attendance at an official opening event of PSA Peugeot Citroën CEO Philippe Varin and chairman Thierry Peugeot alongside Rio de Janeiro state governor, Sérgio Cabral, reflected the importance of the French group enlarging its Porto Real manufacturing plant, 90 miles northwest of the state capital Rio de Janeiro City.

The start of production of the new 208, a model on sale in Europe for less than a year (a rare occurrence here in Brazil which new models usually take longer to reach) coincides with an increased capacity from 150,000 to 220,000 units a year with three shifts, and includes Citroën production. The engine plant was also boosted from 220,000 to 280,000 units per year.

Cost of this project was BRL800m (US$400m) and it included 83 new robots and new automated processes (bonnet, doors and rear hatch) for the assembly lines. From 2010 to 2015 total spend will be BRL3.7bn/$1.6bn.

The Peugeot 208 will go on sale next April and, in 2014, Porto Real will also produce the 2008 compact SUV, a competitor for Ford's EcoSport, Renault's Duster and others.

Carlos Gomes, PSA Peugeot Citroën’s CEO for Brazil and Latin America, dismissed building the architecture-sharing Peugeot 301 or Citroën C-Élysée, the group’s most modern compact sedans, citing high production costs because the key target would be the locally built Renault Logan.

In May last year Peugeot phased out both the 207 estate (206+ in Europe) and the Hoggar light pickup truck. Nevertheless, the latter was back in production last January at a very slow rate. The 207 hatchback and saloon-derivative Passion will co-exist with the 208, together with the Argentine-made 308 and 408 and the French-built 508, RCZ and 3008.

Varin outlined the company’s internationalisation. “It is a fundamental pillar for our development. The proportion of the group’s vehicles sold outside Europe keeps progressing, from 24% in 2009 to 33% in 2011 and 38% in 2012. We are on the way to achieve our objective of 50% non-European world sales by 2015.”

 “Brazil, as one of the largest auto markets in the world, is an essential part in reaching this goal”, he added.

However, he gave no hint of plans for designing and producing vehicles in alliance with Opel or how all this would influence future Peugeot, Citroën and Chevrolet models in Brazil.