PSA Peugeot Citroën's Ryton plant in Coventry is no longer the sole source of the Peugeot 206SW line now that production of the compact station wagon has started in Brazil.

The model is made in the Porto Real plant, along with the 206 hatchback, Citroën C3 and Picasso.

But PSA CEO Jean-Martin Folz said South American production will not affect Ryton.

"The cars that we produce in Mercosur (Brazil and Argentina) supply Latin America countries. Ryton will still make the 206SW for Europe and other countries. With our French factories involved in other projects, Ryton is fundamental to the production of the 206 range" he said.

PSA has spent $US30 million to make the station wagon in the Porto Real plant and expects to produce 15,000 units next year - 11,000 for sale in Brazil in 2005 and 4,000 for export to Argentina, Chile and Mexico.

Brazilian sales start in March.

Production began using with 1.4-litre 8-valve and 1.6-litre 16-valve petrol engines but a Brazil-exclusive 1.6-litre 16-valve flex-fuel engine running on petrol, alcohol or a mixture of the two will be introduced in mid-year.

Folz said PSA's Brazilian operation would again post a loss but not as much as in 2003 and expects break-even for 2005.

He expects production, bolstered by the 206 SW, to reach 80,000 vehicles in 2005, an increase of 21.2% from 2004's forecast 66,000. Porto Real plant has a 100,000 capacity.

Folz refused to talk specifically about new projects in Brazil, saying only that PSA expects to announce new investments in the future.

But suppliers told just-auto that PSA will make the sporty C3 X-TR version locally in 2005 and is also considering production of Project T13, the 206 sedan.

That variant is being developed by PSA and Iran Khodro for launch in Iran during 2006.

Such small sedans are popular in Brazil where such variants of Renault's Clio, Opel's Corsa (sold as a Chevrolet) and Ford's Fiesta (the Ikon) are already available.

Rogério Louro

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