Upon finishing his first visit to Mercosur, PSA CEO Christian Streiff has been in Argentina to inaugurate Citroën C4 saloon production and in Brazil to have a close look at the Porto Real, state of Rio de Janeiro, car manufacturing plant.

But he has yet to fully clarify plans for the two countries. He said that there will be no axing as has happened in Europe and that PSA Peugeot Citroën will develop specific models for the region.

"Mercosur, China and Eastern Europe are markets that will grow in the future and will be granted more autonomy. Our product-focused investments will rise within the next three years, surpassing the same former period. Capacity increase, however, demands caution because we can make better use of current plants by trimming synergies," he told just-auto during an interview in Rio de Janeiro City.

Vincent Rambaud, the new CEO for Mercosur, also choose to refrain from forecasting on the Brazilian market this year, in spite of evidence of a near 15% expansion and the reaching of a new, all-time sales record.

A third shift in Porto Real is perhaps necessary if export volume is to be maintained. But perhaps such an announcement would not sit well right now given job cuts elsewhere.

However, Rambaud confirmed for the second semester the start of exporting flex-fuel engines for the C4 and 307 to be marketed in France and Sweden.

"After hard years, we have managed to stick the head out of the water with financially balanced operations in the two countries. Peugeot was the brand that expanded more among the newcomers with a 5% market share," Rambaud said.

The group's main strategy is to develop less costly models without declining quality and narrowing the suppliers' margins as well.

The C4 saloon (Pallas in Brazil) will be exported to Europe (Spain, initially) in this second semester.


Fernando Calmon