PSA has begun production of the new-generation Citroën Aircross at its plant in Porto Real, Brazil, on 11 November 2015, according to reports in Automotive Business.com. The vehicle goes on sale in the country in December, with localised production the result of a USD150-million investment. The product is also the last product on an investment cycle which brought several new products to the Brazilian market between 2012 and 2015, according to the report. The Aircross is a derivative of the C3 Picasso, specifically developed for South American markets as a sport utility vehicle (SUV). The updated car takes new exterior and interior styling, but continues on its current platform and with the same engine lineup, which is shared with the Peugeot 208 and 2008 as well as the C3. According to the report, the redesign was developed at PSA's Latin America Tech Center. Separately, it is reported that PSA CEO Carlos Tavares said he expects the company will return to regional profitability by 2017; he also noted that it can only justify continued investment when it is profitable. He also said that for PSA's performance in the region to improve, it needs to participate in more segments and attract more customers. The executive is looking to cut costs in PSA's infrastructure in the region, and expects to reinvest those savings into the regional product lineup.
Significance: Sales in the Brazilian market are falling dramatically overall in 2015, with IHS forecasting that the year will end with a 27% decline, to about 2.43 million units, followed by another 7% decline in 2016. Against that backdrop, PSA has also dropped some of its cheaper models, and market share fell in 2014 and 2015. PSA sales are down 40% in Brazil for the year to date (YTD), market share has fallen to 2.3% and it is ranked ninth among all sales parents. Against that backdrop, sales of the updated Aircross are forecast to continue declining, falling from 7,294 units sold in 2014 to about 3,200 in 2016.
