Peugeot rolls last car out of Paris assembly plant
Faced with a shrinking domestic market and burning through cash, Peugeot is shutting the plant at a cost of 3000 jobs, part of a restructuring plan to save €1.5 billion ($2.16 billion) by next year. The company says closing the plant is essential for reducing overcapacity, a problem for many European car makers.
The company has five other plants in France, and Aulnay's importance had declined amid ebbing profitability for the cars it produced. Of a total 2.9 million vehicles that Peugeot made worldwide last year, only 120,000 came from Aulnay.
Over the years Aulnay has produced nearly 8.7 million vehicles, the last car on Friday a Citroen C3 supermini. Peugeot said the car market in the European Union would shrink about 4 per cent this year, and it is desperately looking for ways to gain access to growing economies beyond Europe.
To that end it has been talking with the French government and its Chinese partner, Dongfeng Motor, about the possibility of replacing the founding Peugeot family as its largest investors, according to a Reuters report this month. The negotiations are complicated by the fact that General Motors owns a 7 per cent stake in the French company and has its own agenda in China.
The closure came as a painful shock for the northern suburb of Aulnay-sous-Bois, which is in an area where good jobs are scarce amid France's 11 per cent unemployment rate. The government took the company to task over the plan but later acknowledged it was a commercial necessity.
Frequently Asked Questions about this Article…
Peugeot closed its Aulnay-sous-Bois assembly plant to address overcapacity issues and as part of a restructuring plan aimed at saving €1.5 billion. The plant's closure was necessary due to a shrinking domestic market and declining profitability.
The closure of the Aulnay plant resulted in the loss of 3,000 jobs, which was a significant impact on the local community where good jobs are scarce.
The last car produced at the Aulnay-sous-Bois plant was a Citroen C3 supermini, marking the end of nearly 8.7 million vehicles produced over the years at this facility.
Peugeot is looking to expand beyond the European market by exploring opportunities in growing economies. They are in discussions with the French government and their Chinese partner, Dongfeng Motor, to potentially replace the founding Peugeot family as the largest investors.
General Motors owns a 7% stake in Peugeot, which complicates negotiations for Peugeot's future plans, especially regarding expansion in China, as GM has its own agenda in the region.
Last year, the Aulnay plant produced 120,000 vehicles out of Peugeot's total worldwide production of 2.9 million vehicles, highlighting its reduced importance in the company's overall operations.
Peugeot has indicated that the car market in the European Union is expected to shrink by about 4% this year, which is a factor in their decision to seek growth opportunities outside of Europe.
The French government initially criticized Peugeot's decision to close the Aulnay plant but later acknowledged that it was a commercial necessity given the company's financial challenges.
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