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Peugeot-Citroen Building Two Engine Plants

French automaker is developing a new family of low-emissions engines to be produced in France and Eastern Europe.

PARIS (AP) -- French automaker PSA Peugeot-Citroen said Thursday it is developing a new family of low-emissions engines to be produced in France and Eastern Europe.
 
Europe's second-largest car manufacturer by volume said it is investing euro600 million ($946 million) in the two sites, which will produce small, three-cylinder engines under 1 liter of capacity. The motors will emit less than 100 grams of carbon dioxide per 100 kilometers.
 
In the eastern French town of Tremery, Peugeot-Citroen plans to create more than new 500 jobs at a new plant near an existing Peugeot engine facility. The new site should be operational by 2011, with a capacity of 600,000 motors per year.
 
Peugeot-Citroen is searching for a suitable site in eastern Europe for the second site. Chief Executive Christian Streiff told reporters in Paris that he is looking in Poland, Romania, Ukraine, and Turkey.
 
Investment will be split equally between the two plants.
 
Earlier Thursday, Peugeot-Citroen said revenues in the first quarter rose 2.3 percent as ''spectacular'' sales in Russia, Brazil and Argentina made up for a downturn in the European market.
 
The company said revenue in the three months to the end of March rose to euro15.2 billion (US$24.23 billion), from euro14.9 billion a year earlier.
 
Unit sales increased 6.1 percent to 876,400. In Western Europe, Peugeot-Citroen sold 591,100 vehicles -- 0.9 percent fewer than a year ago -- and its market share slipped to 14 percent from 14.2 percent.
 
In Russia, vehicle sales increased by 29.6 percent to 9,900, and by 36.4 percent in Brazil and Argentina to 59,000.
 
The car maker reaffirmed its worldwide sales target this year of 5 percent volume growth after new launches planned for the second quarter. Streiff has set a target of achieving 4 million vehicle sales by 2010, with the bulk of the growth coming from outside the mature European market.
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