Import duties, Daewoo deal force Peugeot pullout
"We were very satisfied with FSL, but this was the decision of Peugeot to stop production," said Andrzej Nasinski, general manager of Peugeot Polska Sp. z o.o.
Peugeot officials expressed dismay at learning of the Daewoo buyout from a local newspaper article. But sources at the company say they had already considered pulling out of the agreement because of prohibitive Polish import duties on parts from European Union suppliers.
"It is not in our greatest economic interests to have a production base in Poland," said Martin Alloiteau, head of public relations at Peugeot in Paris. The company has no plans for another local manufacturing contract.
Peugeot plans to replace the 405 model on the Polish market with the 406 model. It will rely on imports from factories in France, Spain and the United Kingdom to supply Polish consumers.
The agreement between FSL and Peugeot was signed in 1992 and was supposed to last until 1999. Production volumes were determined annually. The plant assembled a total of 3,500 Peugeot 405 sedans before manufacturing halted last week. The majority of cars produced at the plant was sold on the domestic market, but several units were exported to the Czech Republic and Hungary.
Peugeot has sold 4,000 imported and locally produced cars in Poland this year. Sales have increased by 35% on imported cars from 1,800 in 1994 to 2,420.
Daewoo Motors Poland gained a 61% share of the FSL plant in the agreement signed in October. The remaining shares will be distributed among plant employees and the Finance Ministry. Daewoo has reported that it intends to invest $300 million over the next five years for the assembly of 50,000 Nexia passenger cars. Local Daewoo officials were unavailable to comment on Peugeot's withdrawal.
The FSL deal comes in the wake of an agreement for Daewoo's buyout of Fabryka Samochodow Osobowych (FSO) in Warsaw. The price tag for that plant will be a record $1.1 billion.
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In a related story, the Daewoo Corporation signed a letter of intent on Nov. 3 for the purchase of shares in Lublin-based Bank Depozytowo-Kredytowy (BDK), bank officials said. Daewoo has expressed interest in a 30% stake in the commercial bank.
The Finance Ministry had announced plans to merge BDK with Powszechny Bank Gospodarczy (PBG) in Lodz and Bank Pekao SA as part of the consolidation of the state-owned banks (See interview, WBJ Nov. 3-9).
"Now the government has to make the decision, but this is a chance for the bank to be privatized in a very short time," said Jerzy Brogowski, adviser to the President of BDK. The Council of Ministers is expected to make a decision about whether to sell or consolidate the bank in the next two weeks, he said.
Peugeot officials expressed dismay at learning of the Daewoo buyout from a local newspaper article. But sources at the company say they had already considered pulling out of the agreement because of prohibitive Polish import duties on parts from European Union suppliers.
"It is not in our greatest economic interests to have a production base in Poland," said Martin Alloiteau, head of public relations at Peugeot in Paris. The company has no plans for another local manufacturing contract.
Peugeot plans to replace the 405 model on the Polish market with the 406 model. It will rely on imports from factories in France, Spain and the United Kingdom to supply Polish consumers.
The agreement between FSL and Peugeot was signed in 1992 and was supposed to last until 1999. Production volumes were determined annually. The plant assembled a total of 3,500 Peugeot 405 sedans before manufacturing halted last week. The majority of cars produced at the plant was sold on the domestic market, but several units were exported to the Czech Republic and Hungary.
Peugeot has sold 4,000 imported and locally produced cars in Poland this year. Sales have increased by 35% on imported cars from 1,800 in 1994 to 2,420.
Daewoo Motors Poland gained a 61% share of the FSL plant in the agreement signed in October. The remaining shares will be distributed among plant employees and the Finance Ministry. Daewoo has reported that it intends to invest $300 million over the next five years for the assembly of 50,000 Nexia passenger cars. Local Daewoo officials were unavailable to comment on Peugeot's withdrawal.
The FSL deal comes in the wake of an agreement for Daewoo's buyout of Fabryka Samochodow Osobowych (FSO) in Warsaw. The price tag for that plant will be a record $1.1 billion.
* * * *
In a related story, the Daewoo Corporation signed a letter of intent on Nov. 3 for the purchase of shares in Lublin-based Bank Depozytowo-Kredytowy (BDK), bank officials said. Daewoo has expressed interest in a 30% stake in the commercial bank.
The Finance Ministry had announced plans to merge BDK with Powszechny Bank Gospodarczy (PBG) in Lodz and Bank Pekao SA as part of the consolidation of the state-owned banks (See interview, WBJ Nov. 3-9).
"Now the government has to make the decision, but this is a chance for the bank to be privatized in a very short time," said Jerzy Brogowski, adviser to the President of BDK. The Council of Ministers is expected to make a decision about whether to sell or consolidate the bank in the next two weeks, he said.
