PSA Madrid Plant Goes From Basket Case to Showcase

MADRID – PSA Peugeot Citroen is showcasing the quality and productivity of its Madrid plant as it prepares to launch sales of the Citroen C4 Cactus in Germany and Italy.

The compact CUV went on sale in June in Spain and has been well-received there and in France and Holland. It will reach U.K. showrooms in October.

The Cactus has been a lifesaver for the Madrid plant, which was threatened with closing after PSA assigned production of the Peugeot 208 subcompact elsewhere in 2012. Activity had dwindled to a single shift producing the soon-to-be-discontinued Peugeot 207 CC cabrio and Peugeot 207 Plus hatchback.

Since the April launch of Cactus output, the landscape has significantly improved. The 15,000 orders received for the new model have prompted addition of a second work shift and 200 jobs, and the only memory of past hardships is the dozen Peugeot 207 models that are assembled daily.

The Madrid facility is building 360 units of the Cactus daily in addition to the outgoing Peugeot models, and full-year production is forecasted at 60,000 units, up 20% over the 50,000 assembled in 2013.

Output could reach 80,000 units in 2015, when the Cactus will be the sole model assembled at the Madrid plant. Capacity, however, is 130,000 units on two shifts and up to 160,000 with a third shift.

Some analysts estimate yearly sales of the Cactus could range between 50,000 and 100,000 units. That could call for more activity at Madrid, possibly with an additional model to assemble.

Although PSA insists on billing the Cactus as a successor to the discontinued 2CV small car and its Mehari variant, some industry-watchers say the new model more closely resembles the also-defunct 5 GTL from arch-competitor Renault.

PSA does draw a distinction between the Cactus and the low-cost 2CV and Mehari by introducing the Hybrid Air, a high-efficiency concept based on the Cactus, at next month’s Paris auto show. The concept will feature PSA’s proprietary compressed-air hybrid system.

While the Cactus now in production produces only 82 g/km of carbon-dioxide emissions with the Blue HDi 100 diesel engine, the Hybrid Air version will further improve fuel consumption and CO2 emissions, sources with the automaker say.