PSA Decides To End Small Gasoline City Car Production

After selling its stake in its Czech joint venture with Toyota, the PSA Group has now decided to stop Peugeot 108 and Citroen C1 production altogether.

Three separate sources have come out with this information, with Reuters reporting that PSA now wishes to withdraw from an increasingly unprofitable segment, before it can conclude its merger with Fiat Chrysler.

Carmakers in general have begun reviewing the production of models with internal combustion engines, which require expensive exhaust filtering systems in order to meet tighter emissions regulations. This in turn would drive up the cost of certain entry-level A segment models, like the 108 and the C1.

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“PSA is getting out of both the factory and the A segment business, as it is offered today, and on which manufacturers have arguably lost the most money in Europe,” said one of the sources familiar with the matter.

PSA declined to offer any comments on the future of these two city cars, saying that it was reviewing which products would best meet customer expectations in this segment, while also coping with EU carbon emissions targets.

“This means a reflection with fresh and disruptive ideas,” said a spokesman for the French brand.

Merging with FCA will increase the options available to PSA, seen as how the Italian-U.S. company isn’t ready to abandon its small models just yet – the 500 is already available as a battery-electric vehicle (BEV).

“Current projects could be replaced by new ones made possible by the merger with FCA,” added another source. “The merger is turning all the cards around, especially when you consider that the A segment, from the very first 500 to the Panda, is inseparable from Fiat history.”

PSA and FCA hope to finalize their merger in Q1 of 2021, resulting in the creation of a new company called Stellantis.