FRANKFURT, Germany (AP) — French car makers PSA Peugeot-Citroen and Renault SA plan to invest in Russian production facilities to take advantage of its booming car market and eliminate the financial risk of exporting cars.
Peugeot-Citroen Chief Executive Christian Streiff said Tuesday he is nearing a decision on the location of an assembly plant that could produce up to 300,000 cars a year. St. Petersburg has been ruled out, leaving two or three other possible locations, Streiff said on the sidelines of the 62nd International Auto Show.
Renault CEO Carlos Ghosn said the company's board has yet to make a decision on its planned industrial venture. One possibility is a joint venture with Russian automotive company Avtovaz, with whom Renault is holding talks, he told journalists Tuesday.
Whether Renault builds its own facility or makes an agreement with a local producer, Ghosn said the French car maker needs to produce cars locally to avoid being penalized by the strength of the euro.
''Switching to local production is a must,'' he said. ''There is an urgency for Renault to increase capacity in Russia because of the supply base in euro.''
Ghosn said the Russian car market is ''exploding.''
''If we miss out on it now, it will take a lot of effort to catch up,'' he said.