Final line for the Mitsubishi Outlander SUV; Citroen and Peugeot variants are also made in Kaluga

Final line for the Mitsubishi Outlander SUV; Citroen and Peugeot variants are also made in Kaluga

PSA Peugeot Citroen and Mitsubishi have started full scale production at their joint venture Kaluga plant in Russia which will enable brands from both groups to benefit from Europe’s fastest-growing market.

PCMA-Rus has a production capacity of 125,000 units a year and the assembly plant is 70% owned by PSA with Mitsubishi holding the remaining 30%. Production of the first model, the Peugeot 408, will start this month followed by Mitsubishi's redesigned Outlander SUV from November 2012. Citroen cars will follow later.

The plant cost EUR55m (US$70m) and Thierry Peugeot, chairman of the PSA supervisory board, said: "In order to keep up with the market, it is essential to be here with local production. The launch of full production capacities at PCMA Rus will allow us to increase significantly the production volume in Russia and strengthen the positions of our brands. It reinforces PSA Peugeot Citroen's globalisation strategy. "

Mitsubishi chairmanTakashi Nishioka added: “Our aim in producing vehicles in Russia is to make sure we can provide high-quality locally-built automobiles that specifically meet the needs of Russian consumers. The launch of the full-scale production at PCMA Rus will no doubt be a significant cornerstone in expanding our business in Russia in the mid to long-term.”

Since its launch in 2010, the plant has been a kit assembly operation producing the Peugeot 308, 4007, Citroen C4, C-Crosser and the Mitsubishi Outlander. PCMA-Rus managing director Didier Aleton said: “The plant's full capacity will allow us to produce 125,000 vehicles per year. The production capacity of the Peugeot and Citroen C-segment cars will amount to 85,000, and the remaining 40,000 will be for Mitsubishi SUVs."

From the initial stage of the full-scale production process, local Russian content will include stamped parts, bumpers, wheels and tyres, seats and instrument panels.

The second biggest market in Europe, Russia is considered by PSA and Mitsubishi as one of the key regions for long-term business development. Peugeot and Citroen sales there grew by 35% in 2011, and by 25% in the first quarter of this year.

Mitsubishi’s sales volume in Russia saw a significant increase of 63% in 2011 and it expects to gain further ground with the launch this month of the new Outlander.

With the launch of full-scale production and three new workshops - welding, painting, assembly - the number of plant employees will rise from 1,700 to almost 2,500 by the end of 2013.