Two car manufacturers have invested R10,5 billion in a joint venture and are expected to start producing environmentally friendly small cars in 2005.
Toyota and PSA Peugeot Citroën on Thursday revealed more details of an E1,5-billion (R10,5-billion) investment to jointly build new, environment-friendly subcompact cars for a promising European entry-level market.
Production will start in 2005, with a target output of 300 000 vehicles a year, company officials said in Brussels where the transcontinental partnership was announced earlier.
“We feel that this kind of partnership between independent manufacturers is the right way to meet the challenges of global markets and customers’ changing demand,” said PSA chairman Jean-Martin Folz.
Toyota president Fujio Cho said his company had already started developing a new small car, but eventually found “we were facing issues which seemed very difficult to overcome”.
“When Folz proposed the idea (of a partnership), I became encouraged and convinced that with PSA Peugeot Citroën’s technology and expertise … and with the combined production volume of PSA and Toyota, this project would have a significant potential for success,” he said.
An assembly plant – to be built at a European location to be selected by the end of this year – will produce common platforms. Different bodies will then be put onto the final cars, which will be marketed as “new concept” environmentally friendly Toyota, Peugeot or Citroën products “situated beneath current entry-level models” in terms of price, the companies said.
“The entry-level car market in Europe is expected to expand in the coming years,” Cho said with reference to former communist countries in eastern Europe now poised to join the European Union.
“We further believe that this project is indispensable in the view of pursuing Toyota’s environmental strategies,” including striving to meet tough voluntary fuel economy standards, he said.
Toyota is currently building a transmission plant in Poland, and operates an assembly plant for the city-sized Yaris model in northern France, near the Belgian border.
PSA already supplies diesel engines to Toyota for its Corolla model. It also produces cars and trucks with Fiat of Italy, gearboxes and engines with French rival Renault, and diesel engines with Ford.
