PSA/Peugeot-Citroen is intending to shift production of its next C3 subcompact from France to Trnava, Slovakia, sources privy with the carmaker told Reuters. PSA is shifting production of low-margin small cars away from western Europe, where output costs are deemed too high.
The carmaker is currently building the C3 at its Poissy plant near Paris. The subcompact is Citroen's No. 1 model in Europe, selling 48,614 units in the first four months of 2014 and accounting for over 20 percent of the brand’s sales in the continent, according to JATO Dynamics.
One of the sources told Reuters that PSA is commencing technical operations on the Citroen C3 in the coming weeks in Trnava, Slovakia. Two other sources confirmed that PSA has already determined to produce the new C3 in Trnava, Slovakia.
PSA currently produces C3 Picasso minivan and the Peugeot 208 subcompact in the site. A PSA spokesman disclosed that the French carmaker had vowed to preserve its French plants as part of a labor agreement inked in 2013.
PSA chief executive Carlos Tavares as well as predecessor Philippe Varin has been reiterating that it was no longer viable to build volume small cars in France since stiff competition means prices of such vehicles may not be enough to cover production costs.
In comparison, an auto worker in France earns an average of EUR57 per hour, while a counterpart in Slovakia earns an average of EUR15.50 an hour, according to data from Eurostat.