Slovakia's PSA plant to cut production on slowing demand

26th October 2011, Comments 0 comments

The Slovak plant of French carmaker PSA Peugeot Citroen will suspend production for two weeks on slowing demand for its cars, company spokeswoman Ivana Pavelkova told AFP on Wednesday.

"The suspension has been planned and it is due to the economic situation in Europe which has resulted in a lower volume of orders," Pavelkova said, adding PSA would halt production from October 28 to November 4 and November 14-18.

In response to news that PSA had announced up to 5,000 lay-offs in its European plants for next year, Pavelkova said the Slovak factory was hiring hundreds rather than sacking anyone.

"Definitely not -- on the contrary, we have started hiring 800 new people now," she said.

PSA said in April it would hire up to 900 people in Slovakia to produce a new model in 2012, with total investment reaching 130 million euros ($187 million).

The plant, employing 3,000 people in two shifts, plans to launch a third shift and reach its full operational capacity of 300,000 units a year in 2012.

The plant, which produces vehicles mostly for the German, French and Italian markets, turned out 186,150 Peugeot 207 and Citroen C3 Picasso cars in 2010, a drop from 205,000 units the year before.

Slovakia -- home also to plants of Germany's Volkswagen and South Korea's KIA Motors -- is heavily dependent on car production, topping the global rankings of per-capita car manufacturers.

Its auto makers produced almost 572,000 cars in 2010 and expect to raise output to at least 630,000 this year.

In the neighbouring Czech Republic, which formed a single state with Slovakia until 1993, the TPCA plant -- a joint venture of PSA Peugeot Citroen with Japan's Toyota -- said it was not affected by PSA's lay-offs plan for Western Europe.

"We will only produce fewer cars this year than in 2010, but the drop is nowhere near dramatic," TPCA spokesman Radek Knava told AFP.

He added the factory, which turned out 295,712 Toyota Aygo, Peugeot 107 and Citroen C1 cars in 2010, was not going to change its production plan in the rest of the year.

The Czech economy is also pulled by car production at TPCA, Volkswagen's unit Skoda Auto and South Korea's Hyundai plant.

Making up almost a quarter of Czech industrial output and exports, the three car makers produced a record-high 1,072,263 cars in 2010 and expect to raise output this year.

© 2011 AFP

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