PSA/Peugeot-Citroen is planning more than EUR750 million ($937 million) in investments at its Sevelnord plant near Valenciennes, France to ensure the future of the facility. The Sevelnord plant, a joint venture between PSA and Fiat, found itself looking at a bleak future after the Italian carmaker decided to pull out from the alliance and discontinue the production of its Scudo model.
Last July, PSA and Toyota announced that they reached an agreement on light commercial vehicles for the European market. Under the agreement, PSA will produce a variant of its mid-size vans and their future models for the Toyota. In a statement, PSA said that over EUR400 million of the more than EUR750 investments will be used to fund research and development. According to a PSA spokesman, Toyota would fund part of the investment.
In July, PSA managed to convince most unions at its Sevelnord plant to agree to reduce leaves and increase working-time flexibility. PSA had said that without the concessions, it would choose a Spanish plant to build a replacement for the Peugeot Expert and Citroen Jumpy commercial vans built at Sevelnord, which could lead to the site’s likely closure in 2016.
PSA has been suffering from dwindling sales in Europe. This has been squeezing its profits because of the excess capacity and heavy discounting practices in the continent. PSA held a 20.8 percent share of the light commercial vehicle in Europe in the first half of 2012, earning it the title as the region’s top seller in the segment.