PSA to Keep 3-Cylinder Engine Production in France

PSA Peugeot Citroen says it will expand 3-cylinder engine capacity in France rather than add it in Spain.

PSA will add a production line and 200,000 units of capacity at its engine plant in Tremery, France, which already makes the 3-cylinder units. The company had considered adding the capacity to its engine factory in Vigo, Spain, instead.

The turbocharged 1.2-liter PureTech engine makes between 110 and 130 horsepower and is used to power a variety of Citroen and Peugeot small cars. The engine is 18% more fuel efficient than PSA's naturally aspirated 4-cylinder Prince engines.

The plant selection was based on economic factors, including recent labor concessions, according to PSA. Last year it received a €3 billion bailout that gave the French government a 14% stake in the company.