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VIENNA – Toyota Motor Corp. and PSA
Peugeot Citroen officially cut the ribbon on their new joint venture plant,
Toyota Peugeot Citroen Automobile Czech s.r.o. (TPCA), in Kolin, Czech Republic.
Serial production of the Toyota Aygo,
Peugeot 107 and Citroen C1 small cars was launched at the end of February, and
output so far totals 11,000 cars.
About €1.3 billion ($1.6 billion) was
invested in the facility and development of the vehicles, about €200 million
($244 million) less than originally expected. Still, the project is the largest
single greenfield investment in the Czech Republic since the end of communism.
The TPCA plant covers 306 acres (124
ha) located in the Kolin-Ovcary industrial zone 37 miles (60 km) east of Prague.
The plant operates on a 2-shift/3-team basis. Production was launched with one
team. The second team will start working this month and the third team will be
added in October.
Currently, about 350 cars are
manufactured in Kolin each day.
"That will rise to 1,050 once full
capacity is reached by next January," says TPCA Vice President Jean-Pierre
The 2005 plan calls for output of
100,465 cars. Production will increase gradually, and full capacity levels will
be reached early next year.
"We want to reach full capacity at
the beginning of 2006," says TPCA President Masatake Enomoto.
TPCA is expected to produce about
300,000 units next year.
The new facility currently employs
2,400 people, but that will increase to 3,000 in 2006 once capacity is reached.
Toyota and PSA have been promised
significant incentives by the Czech government, including a full corporate
income tax break for a maximum of 10 years and financial support for worker
training, as well as transfer of developed real estate at a favorable price.
However, not everything is meeting
Toyota and PSA’s expectations. TPCA is unhappy with the Czech government's
failure to provide promised housing for plant workers. The government was to
supply 850 new apartments for workers by mid-2005, but so far Kolin has been
allocated only 136 flats.
About 50 to 60 people quit their jobs
every month, largely because they don’t have suitable accommodations,
TPCA plans to discuss the housing
situation with Czech Prime Minister Jiri Paroubek.
“For us, this is a real
problem," Chantossel says.
The first Kolin-made cars will reach
European dealers this week. Despite the fact the cars are manufactured in the
Czech Republic, most of them will be sold in Western Europe. For a typical buyer
in the Czech Republic or other East European countries, TPCA’s cars are too
small and expensive.
The price of the base Citroen C1 and
Peugeot 107 will start at the equivalent of$9,621 in the Czech Republic, while the least expensive Toyota Aygo will
be priced at $10,555.
By contrast, the lowest-priced Dacia
Logan costs $8,042, while the basic version of the Skoda Fabia starts at $9,048.
Both the Logan and Fabia are larger than the trio from Kolin.
As a result, Automobiles Peugeot
expects to sell only about 900 Peugeot 107s in the Czech Republic this year.
Automobiles Citroen forecasts 350 to 400 C1 sales, while Toyota targets delivery
of 350 Aygos.
Eastern Europe is a growing market for
cars of this size, but initially the largest volumes will be sold in Western
Europe, notes Vincent Besson, director-product and markets for Citroen. “The
main markets for the C1 are France, Italy and Spain,” he says.
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