PSA Peugeot-Citroen will reduce production at its Rennes plant because of slow sales of the Citroen C5, C6 and Peugeot 407 models.

The company will reduce its workforce by 2,000 temporary jobs between now and the end of the year, and the plant will shut down for an additional two weeks at the end of the year.

A PSA spokesperson said this is fully in line with cost-cutting measures announced by chief executive Jean-Martin Folz in September.

Folz said at the time that immediate steps were being taken to generate EUR125m of savings in the second half of 2006, including reducing the number of temporary employees.

The Peugeot 407 is at a low point in its model cycle and is due to be replaced next year by the 408,which is essentially a major rework of the existing model. In addition, sales of the C5 and C6 have failed to meet expectations.

The Rennes plant is the only group facility dedicated to the production of upper, medium and executive segment models - built on PSA's platform 3.

PSA announced last week that its supervisory board has chosen Christian Streiff to succeed Jean-Martin Folz as chairman of the managing board from January 2007.

Streiff previously was CEO of commercial airliner maker Airbus but resigned on 9 October - after only four months in the post - to take the PSA job.