PARIS – Automobiles Citroen may use Canada as its beachhead into North America.

“If we can homologate our cars in Canada, it’s a potential,” says Frederic Banzet, vice-president-international sales. “We’re looking at it.”

Canada’s rules on automotive homologation are not as strict as those in the U.S., and cars such as the Smart Fortwo and the GM Daewoo Auto & Technology Co.–built Chevrolet Epica and Optra are sold there but not in the U.S.

The Canadian market absorbs about 1.6 million light vehicles per year, of which a little more than half are passenger cars, the sector in which Citroen would compete. The French auto maker won’t have a cross/utility vehicle to sell until next year.

Well-established generalists that don’t manufacture in Canada, such as Volkswagen AG and Nissan Motor Co. Ltd., sell about 30,000 units a year in the country.

The top-selling European car in Canada in 2005 was the Mexican-built Volkswagen Jetta, at 18,202 units. The top-selling import was the Mazda3, at 50,713 units.

Citroen has been expanding rapidly overseas. Last year, it sold 1,395,000 vehicles, including 244,000, or 17.5%, outside Europe. In the first half of this year, Citroen sales were down 2.2% in Europe but up 19.2% elsewhere.

Canada’s conservative government is developing new rules for automotive emissions for 2010 called “Green Plan Two” that could make Canada more attractive for Citroen, thanks to its diesel engines.

Environment Minister Rona Ambrose, speaking to the House of Commons in Canada last week said, “We are…engaging the eight United States (northeastern states) on their (Regional Greenhouse Gas Initiative) climate-change system, and we are in talks with California about its new legislation."

If the new rules favor greenhouse gas emission reductions, it will boost the case for diesels. If the rules penalize nitrogen-oxide production, it could hurt Citroen’s chances.

Until 2010, Canadian auto makers are working under a voluntary plan to reduce greenhouse gas emissions by 5.8 million tons (5.3 million t) per year. If the entire gain were made through better fuel economy, the average new car would improve from 26 mpg (9.0 L/100 km) to 34 mpg (6.9 L/100 km), according to Johanne Whitmore, a climate-change policy analyst with the Pembina Institute quoted in Toronto’s The Globe and Mail newspaper.

Modern European diesels are about 25% more fuel efficient than gasoline engines.

“North America is talking about diesels,” Citroen’s Banzet says. “In Canada they are a good move for the environment. With the particulate filter, the diesel is the best answer today.”

Banzet says that in the U.S. “there is a gap between the character of our products and what is needed,” but in Canada, Citroen has a special advantage.

“There is a Francophile attitude, at least in Quebec,” he says, which would help Citroen sell cars there. Quebec accounts for about 23% of the total Canadian market.