By on May 26, 2010

Renault has made a big splash with their el-cheapo Dacia in the European market. In the first 4 months of this year, 17 percent of Renault’s sales came from Nicolae Ceausescu’s former auto works in Romania. France’s PSA doesn’t want to take it any longer, and now plans for their own low-cost line.

Their cheap car won’t come from low wage Eastern Europe, it will be made in PSA’s existing plant in Vigo, Spain, says Automobilwoche [sub]. Low cost cars don’t mean low investments: PSA will have to invest €1b into the plant to bring it up to speed. Making cheap cars that make money isn’t easy.

PSA seems to have big plans for the little cars: With a capacity of 384,000 units annually, Vigo is the largest of PSA’s  plants, bigger than PSA’s  lead plant in Sochaux, France (275.000 units.)

PSA is a little late to the game. The big sales successes for cheap cars in Europe were cause by scrapping bonuses. However, PSA plans on big sales in emerging markets.

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9 Comments on “PSA Going Downmarket...”

  • avatar

    wasn’t the PSA goign to re kindle the old flame that is Talbot as its low cost arm?

    they have a decent base in the current Peugeot 206 hatch , break and sedan… base a pickup and a panel on that, square off the design, and they have themselves a platform and car that has paid for most of its original development.

    it should be easier for Peugeot to do now than Renault, now that they know how Renault did it. plus they have the basics

  • avatar

    Well I live in Colombia and I currently own a 2006 Renault Logan 1.6 and a 2004 Peugeot 307 2.0 Break. The Logan is a 100 times more reliable than the peugeot. I just can’t imagine how crappy and unreliable that PSA’s lowcost car could be.

  • avatar

    PSA might have higher investment costs in Spain than Renault for Dacia in Romania. There, wages were so low (about 5€/h) that Renault had no need to invest heavily in automation technology.

  • avatar

    The French seem to be also going to the selling-the-old-version strategy that is used in Brazil.

    Both Renault and Peugeot sell old versions of their B-segment cars: 206+ and Clio. Fiat (Italian) has the Punto Classic.

    I think their cheap car development could be handed to the Iranians or the Brazilians.

    They have a partnership with IKCO, which AFAIK, developed the 4dr version of the 206. IKCO’s Samand is based on the 405 platform.

    My bet is that they’ll continue to make the 206 in other flavors.

    Bertel, is there more information about which specific model they’re going to produce? Platform?

  • avatar

    Almost sure it will be the 206 + (207 Compact) line, the second would be the 107 subcompact, in a stripped down version I guess, (Steel Wheels, no radio, no trip computer ect).
    I also have a 307, gasoline version and haven’t had no major problems other than maintainance as usual.

    Saludos from Mexico

  • avatar

    I think we’ll see a lot of this sort of thing over the next few years as the economies of the work “recalibrate”. It’s the 1980s all over again, skinny-leg jeans, large sunglasses, fluffy hair and de-contented econoboxes. A-ha just did their farewell tour, sadly.

    All of you who’ve been bemoaning the fact that we can’t get cars like we used to get** are likely to get your chance.

    ** you know, like the Geo Metro, which everyone swears they’d buy if it were still available.

  • avatar

    The Dacia limeup is thought from the start to be economical to build. Flatter windows-> cheaper to produce. The list goes on to everything. It’s not an old plateform were the tooling can still be of some use. It’s efficient shared plateform with specially designed flavored topping.

    It’s a different process altogether to lower the cost of a formerly expensive (or somewhat expensive) car by putting shitty components. Than it is to design a car to be at the same time cheap and reliable.

    Beside, Renault and Dacia have been working together since the 60′ not exactly newlywed discovering life together. As for the Logan… You can see her as a new Renault 8 / Renault 12 week end track car too. Not a massively overpowered poseur mobile like an RS4 who will just speed inside school zone to impress milfs, but more like a light cup car eagerly waiting to have some cheap fun a la “friend with benefit”

  • avatar

    A-ha just did their farewell tour, sadly

    Unless I fell asleep and missed the rest of 2010 no they haven’t – December 4th 2010 in Oslo – you can still catch ’em ;)

    Back on topic De-contented boxes like the pre-bloat PSA Pug 206 might not be such a bad thing, as the B-segment has gained in girth over the past few years it’s left a definite gap in the market for genuinely small small cars which *aren’t* designed simply to be city runarounds.

  • avatar
    Augie the Argie

    I dislike this little cheap suckers, I’m glad the europeans are getting them after making fun of our cars in South America. They sell well because we have no other choice: e.g. Pug 206+, Renault Sandero/Logan, VW Gol, Fiat Palio, Chevy Classic/Sail, Brazilian Ford Ka. Gladly we still have modern offerings such as Citroen’s C3 and Honda’s Gen.II Fit.

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