PSA to Boost Brazil Investment

PSA Peugeot Citroen says it will spend €240 million on its 11-year-old manufacturing complex in Porto Real, Brazil, over the next three years.

The investment will be used to expand assembly plant capacity 38%, develop new models and retool to produce them. PSA does not disclose the future annual capacity.

A previously announced €530 million investment in Brazil in 2010-2012 included preparations to begin building the next-generation Citroen C3 supermini in Porto Real earlier this year.

The factory, which built its 1 millionth vehicle this week, makes hatchback, crossover and MPV variants of the C3 and Peugeot 207 small cars. The complex also includes an engine plant.

The new overseas investment will likely be unpopular in France, where government officials and unions are challenging PSA's plans to close an assembly plant and shed 8,000 workers.