PSA to Idle Madrid Plant But Plans New Model for 2013

MADRID – The negative effects of weak European auto sales continue to hammer Spain’s auto industry.

The latest blow comes from PSA Peugeot Citroen, which plans to idle its Madrid plant for 47 work days, Oct. 6-Dec. 31, affecting 2,700 employees. Nearly 400 temporary workers will lose their jobs altogether.

Citroen C-Cactus base for new model to be produced by PSA in Spain.

PSA-Spain sources say the measures come as a result of the contraction of the European new-vehicle market, where 2011 forecasts call for a 5% decline in sales in France, 7% dip in Italy and 15% falloff in Spain.

Plant management tries to soften the blow by revealing PSA has assigned a new model to Madrid, which will go into production in 2013.

The facility now assembles the 207 3- and 5-door hatchback, cabrio, coupe and wagon models.

PSA plans to launch a 207 replacement, codenamed A9 and likely to be marketed as the 208, but it will be built at the Poissy, France, and Trnava, Slovakia, plants.

The Madrid operation now needs to survive until the planned spring 2013 arrival of the new model, derived from the C-Cactus concept unveiled at the 2007 Frankfurt auto show.

The plant produced 125,000 units in 2010, but daily output progressively has declined through the year’s first nine months to fewer than 300 vehicles.

Executives here are trying to extend the life of the current 207, lobbying PSA management in France for the OK to build a low-cost version of the car until the new model arrives.

PSA’s other Spanish plant in Vigo appears in better near-term shape. It is slated to produce a low-cost version of its Citroen C4 sedan for sale in emerging markets and Spain.

In addition to the C4, the facility also assembles the electric Citroen Berlingo and Peugeot Partner models.