Media reports said last week that the second largest carmaker in Europe was set to invest $250 million in the new plant in Russia, which it expected to complete by 2009.
David Rio, director for eastern Europe and Mediterranean countries, told a news conference on the sidelines of an international auto show in Moscow that the company was considering opening a plant in Russia but no specific decisions had been made.
Rio said the France-based carmaker, which sold a total of 3.39 million cars in 2005, planned to increase sales in Russia 70% on 2005 to 16,000 because Russia was a strategic market for Peugeot. He said next year it could sell 20,000 or perhaps even 30,000 cars on the Russian market.
Rio said Peugeot would start selling its 207 and 206 sedans for $14,400 and 12,200 respectively in Russia by the end of the year.
He also praised the Moscow International Motor Show, which opened Wednesday and will last until September 10, and said it would definitely become an integral part of the global automotive industry.
A government source said Thursday Peugeot was in talks with the Russian Ministry of Economic Development and Trade on a draft investment agreement granting it tariff concessions on imports of assembly parts.
The investment agreement may only be signed after government agencies approve a draft deal between the ministry and the company on the car-assembly plant. The ministry said it expected a response in early September.
Peugeot Citroen, which posted a net profit of $1.27 billion in 2005, is the latest major foreign automaker to consider construction of its own assembly plant in Russia.
U.S. Ford Motors currently assembles its cars in Vsevolozhsk, outside St. Petersburg, and General Motors, BMW and Kia have plants in the Kaliningrad Region, Russia's exclave on the Baltic Sea. Germany's Volkswagen and Japan's Nissan are also planning to launch production in Russia soon.
