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Peugeot May Add Third Diesel Engine Line

The French auto maker may look to Eastern Europe for a plant for venture with Toyota...

Peugeot, the second largest of the European car manufacturers, might add a third assembly line to make diesel engines for the small car that it will build with Japanese group Toyota, said Chief Executive Officer Jean-Martin Folz.
?We are considering this,? said Folz, in an interview at the Geneva Motor Show. He declined to say where the new line might be built. The company makes 1.4-liter diesel engines that will be used in the car, in Douvrin, France, and will open a second production line in Tremery, France, this year.
Peugeot and Toyota formed a venture last year to build a $1.2 billion factory in the Czech Republic to produce 300,000 small cars annually, starting by 2005. Toyota said yesterday that it would spend 300 million euros to expand a Polish transmission and engine plant to supply the Czech venture.
Folz also said Peugeot could produce the small car in other emerging markets, such as China or Brazil. ?Our agreement (with Toyota) allows us to do this,? he said.