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Sat 7 Oct 2006 12:00 AM

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Car plant construction cancelled after Peugeot slump

French car manufacturer, Peugeot, has cancelled the construction of a second assembly plant at its Trnava plant in Slovakia in a bid to cut costs amid a slump in sales.

The company had budgeted US $444 million (SKK13.1 billion) for the project, which was planned for a new model to

be launched in 2010. Assembly will now take place at the existing facilities, saving $254 million.

In July, Peugeot blamed rising raw materials costs, weak European sales and fierce competition from Asia for a 60% plunge in profit in the first half of this year.

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