Bloomberg News (Paris) - PSA Peugeot Citroen (UG), Europe's second-biggest carmaker, said France needs to increase spending on development and training as the government works on an assistance package for the auto industry.
More money should be invested in research, apprentice schemes and standardization of electric cars, Chief Executive Officer Philippe Varin said in a briefing at a plant in Poissy, near Paris, where production of the 208 model began today.
Peugeot and French rival Renault SA (RNO) have until the end of February to provide ideas for the forthcoming program, French Industry Minister Eric Besson said at the event. The government had said Jan. 2 that it planned to reveal details of the new "pact" with the industry by the middle of the month.
"Hopefully Renault and Peugeot won't go to these negotiations with different agendas," said Thierry Huon, an analyst at BNP Paribas in Paris with ratings of "neutral" on Peugeot and "underperform" on Renault. "These kinds of thing can take more time than expected. You need to find consensus."
French passenger car registrations fell 18 percent in December, dragging the annual decline down to 2.1 percent. Peugeot's European sales fell 9 percent last year.
The future of Peugeot's plants in Aulnay and Sevelnord, France, is undecided beyond current production cycles, Varin said. The former will build the Citroen C3 through 2013, while an agreement with Fiat to produce light commercial vehicles at the latter lasts until 2017. Paris-based Peugeot is looking for other partners or solutions for after that date, he added.
Some 550,000 208s should be sold in 2013, 400,000 of them in Europe, in what will be its first full year of production, Varin said. Peugeot is investing 600 million euros ($789 million) in the car, including 350 million euros in development funds, adding 700 permanent and 300 temporary workers in Poissy.
