France’s PSA will this month begin building a new engine plant in Porto Real, Rio de Janeiro state, writes Rogério Louro Alves.

The plant will be located alongside the vehicle factory opened in February to make the Citroën Picasso and Peugeot 206.

PSA is investing $US50 million to build its new 110bhp, 1.6-litre, 16-valve engine in Brazil and expects to start producing 50,000 units a year from February 2002.

The new plant will produce engines for the Argentinean-made Peugeot 206 and the Citroën Xsara built in Uruguay.

Strangely, the Brazilian-made versions of these cars use different engines. The Picasso has a French 16-valve, two-litre motor and the 206, to be launched in June, will have a Brazilian Renault one-litre, 16-valve unit.

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