PSA Peugeot Citroen has reiterated it is suspending production temporarily at its factory in Slovakia because of slowing demand in Europe but added that the plant was unaffected by plans to axe 3,500 jobs in Europe during 2012 as part of plans to reduce costs by EUR800m.

The company confirmed it would halt production between 28 October and 4 November and 14-18 November.

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A spokesman said the Slovak factory was hiring rather than firing workers and that the suspension has been planned due to the economic situation in Europe which has resulted in lower orders.

In April, PSA said it planned to hire up to 900 people in Slovakia to produce a new model next year, with total investment of EUR130m (US$187m).

The plant, employing 3,000 people in two shifts, plans to launch a third shift and reach its full operational capacity of 300,000 units a year in 2012.

The plant produces vehicles mostly for the German, French and Italian markets.

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Volkswagen and Kia also have plants in Slovakia and the three automakers produced almost 572,000 cars in 2010 and expect to raise output to at least 630,000 this year.

In the neighbouring Czech Republic the PSA-Toyota TPCA joint venture plant also said it was not affected by lay-off plans. The factory produced 295,712 Toyota Aygo, Peugeot 107 and Citroen C1 cars in 2010, and said there are no plans to change its production forecast for this year.

Skoda and Hyundai also built in the Czech Republic  and the three car makers produced a record-high 1,072,263 cars in 2010 and expect to raise output this year.