PSA/BMW In Engines Building Venture

PARIS, Jan 31, 2003; Reuters reports that French carmaker PSA Peugeot Citroen said on Friday it would begin manufacturing its new family of small gasoline engines, developed with BMW, at a new production unit in Douvrin, France at the end of 2005.

The new unit, which will be attached to an existing plant that produces engines for both PSA and Renault, will require an investment of some 430 million euros ($465.2 million) and employ 820 people.

PSA said the cost would be divided between the two manufacturers according to the volume of engines produced for each firm.

PSA and BMW announced in July of last year that they planned to build a new family of small engines for the Peugeot and Citroen brands as well as future models of BMW's Mini.

At the time, the companies said initial costs for the project would total 750 million euros.