PARIS – PSA Peugeot Citroen will launch assembly of two sedans at its new Russian joint- venture plant, OOO PCMA Rus, from complete-knocked-down kits in 2012.

“One will be the Peugeot 408, already in production in China and which is the model we want to launch in Russia,” Bernd Schantz, PSA CEO in charge of Russia, Ukraine and other Commonwealth of Independent States countries, tells Ward’s here.

“The other will be a sedan version of the Citroen C4 hatchback unveiled at the Paris auto show,” he says noting the new version does not yet exist.

PCMA Rus, a joint venture owned 70% by PSA and 30% by Mitsubishi Motors Corp. and based in Kaluga, launched assembly of the Peugeot 308 hatchback from semi-knocked-down kits in April.

It added the current Citroen C4 hatchback in July and the Peugeot 4007, Citroen C-Crosser and Mitsubishi Outlander cross/utility vehicles in September.

Schantz says assembly is running at about 1,000 vehicles per week. Of the 50,000 units planned for 2011, 38,000-39,000 will be PSA brands and the remainder Mitsubishi.

Hatchbacks will be phased out with the plant’s switch from SKD to CKD assembly in first-half 2012, as PSA believes sedans are a more popular body style for the Russian market.

“With a market share of about 40%, the C-segment is clearly the leading segment in the country,” Schantz says. “Unfortunately, we only have hatchback versions today, whereas we are sure we will achieve a great leap forward with (sedans).”

Some of the parts for the Russian-made Peugeot 408 will come from China, but Schantz says the auto maker is targeting local content in the 35%-45% range.

There are no plans to source complete cars from China for sales in Russia or other CIS countries.

With a combined market share of 2.8%, neither Peugeot nor Citroen are among Russia’s best-selling brands. Peugeot currently is ranked No.15 with sales of 25,219 units through September, up 6.4% from like-2009. Citroen, in 25th place, saw its 9-month sales increase 18.9% to 11,689.

“We are planning to reach a market share of over 4% in the coming year and 8%-10% over the next five to 10 years,” Schantz says.

There currently are some 65 Peugeot and 45 Citroen retailers in Russia, and in the coming year both brands will each add 10-15 more. “We also replaced some of our dealers this year, so we now can say we have set up a top dealership network in Russia,” Schantz says.

As a result of the global economic crisis, the Russian light-vehicle market fell by nearly half last year, from 2.9 million units in 2008. Schantz expects industry sales of about 1.9 million this year.

“Market estimates see 2.2 million (sales) for next year, while some manufacturers are reckoning with 2.4 million,” he says. “I think it would make sense to assume that a level of 4 (million) to 4.5 million vehicles can be achieved per year over the next decade.”

Assuming that level, PSA is targeting an 8% share and annual sales of 320,000 in the next five-10 years, Schantz says.

PSA has a sales average of 700 to 800 vehicles per dealer in Russia per month. To reach the 320,000-units target, the auto maker would need 300 to 400 dealers in the country.

“Today, our main focus is on Moscow and St. Petersburg, where our market share is disproportionately high,” Schantz says. “What we don't have at the moment is a certain amount of coverage in other parts of the country, which in a place as large as Russia is not that easy.”