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Peugeot to decide whether to open Russian plant later this year

PSA Peugeot Citroen, Europe's second-largest carmaker, will decide whether to build a factory in Russia by the end of this year, as the country's nine-year economic boom increases demand for autos.

„We're considering having a plant there, but we don't know yet which plant, or if we will be alone or with a partner,” said Frederic Saint-Geours, head of Paris-based PSA Peugeot Citroen's Peugeot brand, in an interview in Tokyo. „We will answer that later this year.” Peugeot may join automakers such as General Motors Corp., Toyota Motor Corp. and Renault SA in expanding in Russia to tap rising demand for foreign brands. Russians spent a record $32 billion on new cars in 2006, according to PricewaterhouseCoopers LLP, as the country benefited from oil and gas sales, increasing disposable income. Renault, France's second-biggest carmaker, will spend $150 million in the next two years to double production of Logan cars in Moscow as Russian demand for the economy-class sedan surges, the company said in February. Peugeot today introduced the 207 model in Japan, aiming to sell about 8,000 vehicles a year, Saint-Geours said. Shares of Peugeot yesterday rose 0.5% to €49.25 in Paris. (Bloomberg)