Peugeot-Citroen chooses Spain to build new model

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French auto-maker PSA Peugeot Citroen said Tuesday it has chosen its Vigo site in Spain to build a new model specially designed for emerging markets.

The company said the middle-range new car, to be sold under both the Citroen and Peugeot marks, was designed to meet demand in developing countries where a middle class is beginning to emerge and drive consumer markets.

Initial markets will be countries around the Mediterranean Sea, in the Middle East and Africa for a car which marks just the first step in a major programme to tap the rising middle classes, it said.

The Vigo plant is the company's largest, producing just under 385,000 vehicles last year with a workforce of more than 7,000.

Press reports earlier said Peugeot-Citroen opted for Vigo over Poland or Turkey because the plant offered the lowest cost base.

Spanish union officials welcomed the announcement.

Unions in France said they had not been informed of the decision.

© 2010 AFP

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