It has been reported that French automaker Peugeot has cancelled plans to establish a manufacturing plant in Mexico, in the short-term future.

Peugeot began looking at a range of possible locations in which to build a plant at the beginning of the year, and eventually chose a site in the central Mexican state of San Luis Potosi.

Although Peugeot has not yet issued an official statement, the company is apparently looking to take advantage of the recently signed Mexico-EU free trade to import vehicles to Mexico in lieu of establishing a plant in the country.

The company earlier had planned to invest 200 million dollars in an assembly plant for sub-compact models in Mexico.