Peugeot reduces 208 output due to weak demand in Europe

Article by Christian Andrei, on October 9, 2012

The demand for the Peugeot 208 subcompact has been weak in Europe due to the condition of the industry so its output will be reduced by PSA/Peugeot-Citroen. A Peugeot spokesperson told Automotive News Europe that the company is cutting producing and lowering its sales outlook for the 208.

The spokesperson declined to confirm reports from the media about Peugeot’s target to sell 140,000 units of the 208 in 2012 instead of the 175,000 it had initially set out to accomplish. Last Friday, the Wall Street Journal said that starting on Oct. 10, the hourly output of the 208 will be reduced at plant in Poissy, west of Paris, from 52 to 35. In addition, it will drop one of the three shifts in Poissy in early December.

A CGT union representative told Automotive News Europe that Peugeot will remove its night shift for the production of the 208 at Poissy at the end of November. He also said that Peugeot intends to get rid of 850 temporary worker positions at the site by the end of 2012. The Peugeot spokesperson said that the brand still hopes to get a 10% share in the subcompact segment in Europe by the end of 2013.

However, it believes that overall industry volumes in the sector have to be lower than the predictions made earlier this year. In early 2012, Peugeot made a prediction that it will sell 550,000 units of the 208 throughout the world and 420,000 units in Europe in 2013.

According to Deutsche Bank analyst Gaetan Toulemonde, the 208 sales were affected by the economic downturn. Toulemonde said that the overall Europe market is currently weak but that the second half of this year will be weaker than anticipated a few months ago.

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