Toyota Motor of Japan and PSA Peugeot Citroen of France announced Friday that they would develop and build together a small, fuel-efficient car for the European market.
The companies said in a statement that they expect to sign a formal agreement later this month and announce details then.
Japanese news reports said that if the deal went through, the companies intended to build 300,000 of the small cars a year, sharing a common platform or underbody.
The benefits for Toyota would be an expansion of its model lineup in Europe beyond the Yaris, a subcompact known in Japan as the Vitz. The Yaris competes in Europe with market leaders like the Volkswagen Golf. Toyota has manufactured the car at Valenciennes, in northern France, since January of this year.
For Peugeot, the advantages appear to lie in gaining a new small car below its Citroen Saxo and Peugeot 106 models, while sharing the development costs with Toyota.
Bertrand Bellanger, a Toyota spokesman in France, said the companies were studying sites for a joint factory, including locations in Eastern Europe and at the site of a new Toyota factory at Valenciennes.
Market share
But he also said that an Eastern-European country, possibly Poland, appeared to be the probable choice because of cost advantages like low wages and Poland's expected entry into the European Union, which has eliminated trade barriers.
Toyota will deploy the new small car, designed for predominantly city use, as part of its effort to widen its market share in Europe, which at 3.7 percent is less than half its share in the US. Though relatively strong in Britain and Germany, Toyota has lagged in other big markets like Italy and France.
To overcome that weakness, Toyota opened in January the US$570 million factory at Valenciennes where it manufactures the Yaris. Sales have been so strong that Toyota's president, Fujio Cho, announced in June this year that Toyota would raise production to 180,000 cars a year, from 150,000. From January to May, Toyota lifted its European market share to 3.7 percent, from 3.6 percent in the same period last year, even as the overall European market contracted by 3.3 percent.
For Peugeot, the deal is typical of the kind of industrial alliances that its executives have pursued over the years to cut costs and gain economies of scale while sitting out the round of mergers and acquisitions that swept the global automobile industry. Earlier this year, for instance, Peugeot's chairman, Jean-Mart Folz, announced a similar agreement with Ford to cooperate in developing and building diesel engines. That agreement followed older and tested alliances with Fiat of Italy and Renault, Peugeot's domestic rival, to develop and manufacture components and entire vehicles.
Marc Ferrant, a Peugeot spokesman, said the new model will be sold under Peugeot's two brands, Peugeot and Citroen.
Adam Collins, an analyst with Schroder Salomon Smith Barney, called the agreement "a helpful step to achieve greater economies of scale, without the irritations of being in a full-blown alliance."
Peugeot's strategy has yielded considerable success. In recent years, Peugeot has overtaken larger rivals, like Ford and General Motors, to capture the second-largest share of the European market, after Volkswagen.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2