The PSA Group will invest $US 45 million in its Palomar plant to produce the Peugeot 307 model in Argentina. The automaker will start production of the vehicle in 2004.

The Argentine-made Peugeot 307 will be equipped with 1.6-litre 16-valve engine produced by PSA Group’s Brazilian engine plant, in Porto Real City.

The 307 model made in Argentina will supply the local market and will also be exported to other countries in Latin America.

PSA Group planned to start the production of the 307 in Argentina in 2002, but postponed the decision due to the Argentine economic crisis.

PSA’s Palomar plant makes the Peugeot 206, as well as the Partner and the Citroën Berlingo.