Fiat, Peugeot Extend Joint Vehicle Accord To 2017

MILAN, January 27, 2003; Dow Jones reported that Fiat SpA Monday announced an accord with Peugeot SA to collaborate on the development and production of light commercial vehicles.

The deal, announced by Fiat Auto Chief Executive Giancarlo Boschetti and PSA Peugeot Citroen Chairman Jean-Martin Folz, prolongs an existing accord first begun in 1978 until 2017.

The agreement calls for EUR1.7 billion in investment in two plants, one in France and one in Italy, to produce 260,000 vehicles a year, beginning in 2006.

Fiat Auto lost EUR1.3 billion in the first nine months of 2002. But those losses stemmed from collapsing sales of its passenger cars, which sunk to a record low 28% of Italy's domestic market.

The Italian company's commercial vehicles line, which last week was made a separate business unit, had a 49% share of the Italian market in December and a 15% share of European sales.