PSA Peugeot-Citroen will close its Los Andes plant, in Chile, at the end of the year, writes Rogério Louro.
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The company has assembled vehicles from completely knocked down (CKD) kits in Chile since the 1960s but production volumes have steadily fallen along with reduced exports to other Latin America countries.
Chilean-built cars are no longer competitive. Mexico and Colombia have signed agreements with European Union countries to reduce import taxes from 2004 and vehicles made in Europe will be cheaper than the cars assembled in Chile. Mexico and Colombia are the two biggest markets for PSA Chile, but will start to take cars from France next year. The Chilean market alone cannot justify the Los Andes plant remaining in operation – it currently produces only 12 Peugeot 206s a day.
The 112 assembly workers will keep their jobs, however. The plant will be converted into a PSA logistics centre and its staff transferred to the new operation.
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