PSA Revising Small Diesels; Expected to Retain Ford Partnership

PARIS – PSA Peugeot Citroen plans to revise its 1.4L and 1.6L diesels for 2017-2018 to meet the Euro 6.2 tailpipe regulations, the second phase of tightening regulations for oxides-of- nitrogen emissions.

Ford likely will continue to be PSA’s partner on the revised powerplants.

PSA says it will build both models of the DV-R engines at the Douvrin factory Francaise de Mecanique, which is a 54-year-old joint venture with Renault that employs 3,200 workers.

The plant presently builds the 1.4L, known as DV4, as well as two gasoline engines for PSA and a gasoline engine for Renault. The 1.4L engine in 54-hp and 68-hp versions is used in PSA’s A- and B- segment cars such as the Peugeot 208 and Citroen C3.

Ford and PSA agreed in 2010 to extend their partnership on developing smaller diesel engines, although in 2012 they decided to make 2.0L diesel mills separately.

While the revision of the 1.4L and 1.6L engines is not specifically covered by the 2010 agreement, PSA is installing capacity for 640,000 engines at Douvrin in 2017 and will have another 640,000 units in its own engine plant in Tremary, France, in 2018.

Spokesmen for both PSA and Ford in France say while there has been no announcement, the long lead times and installed capacity indicate a continued partnership.

Slightly more than half the cars sold in Europe are powered by diesels, but most analysts predict gasoline to take more market share because the diesel aftertreatment is expensive. However, diesels are expected to maintain their volumes if not their share.

PSA says it will invest €60 million ($78 million) in the new production lines at Douvrin. Political pressures may be behind what amounts to an early announcement of a project that remains four years away. Workers at the plant recently agreed to concessions, and the announcement is a sign that they were not for nothing.

The union agreed to 830 job cuts with no replacements through 2018 and to freeze salaries for two more years in exchange for job protection for the workers who remain.

PSA says it plans to close its assembly plant in Aulnay this fall, and the announcement for Douvrin may soothe bad feelings over the downsizing. PSA says in a news release that it “reaffirms through this project its anchorage in France and its desire to shore up its industrial investments in the country.”