PSA Suspends Chinese Minicar Plans

Here's another enthusiastic plan that bites the dust following the consequences of the economic turmoil: it appears that PSA Peugeot Citroen is now considering canceling the minicar it planned to build in China, citing the financial problems in both China and overseas as the main reason. Although the French alliance has never talked about these plans, sources within a number of local supplier confirmed that a minicar based on Citroen C1 and Peugeot 107 and internally-known as A5 was expected to enter production in the next few years.

Mass-production of this particular model was initially expected to begin in 2012, Autonews wrote, in Wuhan, Hubei province. The French group already owns two production sites in this region but the A5 was believed to be designed by a third factory. Furthermore, government sources claim PSA has already established a plan for the construction of a 1.6 million square meters facility in Wuhan but, once again, no details have been confirmed by French officials.

Alexis Varnier, spokesman for PSA in China, told Autonews that "I've not heard about that", while a PSA spokesman in Paris said the alliance has never planned to build a third factory in Wuhan.

"This was something that (former CEO Christian Streiff) may have spoken about, as part of discussions on potential strategy when he took over in 2007, but those were entirely different circumstances than the ones we face today," the spokesman said.

At this time, PSA uses the Chinese facilities to produce five Citroen models and three Peugeot vehicles, including Citroen Elysee, C-Triomphe, C-Quatre, Xsara and Picasso as well as C2 and Peugeot 307, 206 and 207.