20 July 2001: Toyota and the French PSA Group (Peugeot/ Citroen) have signed an agreement for the joint development and production of small cars primarily designed for European markets. Production is scheduled to start in 2005.

The companies say the cars will be positioned below current entry-level models (such as Toyota's Yaris, above, and Citroen's Saxo, below) with 1-litre petrol engines and 1.4-litre diesel engines.

They say the move will pave the way for ‘a new market of vehicles’, which will thoroughly retain all the essential features of a real car, and will offer, at attractive prices, efficient solutions to environmental and urban mobility-related requirements. Target customers also include current buyers of used or outdated cars.

The project will offer clearly different models and specific styles for the vehicles of the two groups but with a strong commonality for the car structure and components.

Toyota will be in charge of development and production while PSA Peugeot Citroen will be responsible for procurement. The two groups will set up a joint venture company on a 50/50 basis.A production site in Europe will be decided at year-end. The plant is expected to have a production capacity of around 300,000 units a year.

Total investment for this cooperation is estimated at approximately 1.5 billion euros. IA