French group PSA mulls low cost car

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French car group PSA Peugeot Citroen said before the Geneva Motor Show opens on Thursday that the the group is thinking of setting up a low cost brand, in the steps of rival Renault.

PSA is "studying the question for Europe," brand director Jean-Marc Gales said in the western Swiss city, after the company had shown reticence about the idea.

However, no decision has been taken and the top French car maker did not suggest a timescale for a launch.

Renault's Dacia brand has proved to be a major success for the French car maker since it was launched in 2004 with a Romanian-made cheap but solid small saloon aimed initially at developing eastern and central European markets.

"In 2011, Dacia will be the first European brand to offer online sales of its ordinary new car range," Renault's global marketing director Stephen Norman told AFP.

PSA, which this week intensified its partnership with German premium car maker BMW to build hybrid petrol electric engines, had even ruled out the idea of a low cost car until a few months ago.

"One thing is for sure it will neither be a Peugeot, nor a Citroen," said Gales, even ruling out the possibility of selling such a car through their current dealer network.

Renault by contrast is planning on sales of three million Dacia vehicles in 2013, compared to 2.6 million last year, with low cost vehicles accounting for 28 to 30 percent of worldwide sales, according to plans released last month.

The range is being expanded and the saturated Romanian manufacturing plant will be supplemented from 2012 by a new plant in Morocco.

"We will be extremely faithful to our credo for Dacia in Europe, that is cars which are built for people who have limited finance," Norman said.

© 2011 AFP

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