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February 10, 2017 01:00 AM

Recticel fire continues to impact Peugeot production

Bruce Gain
Automotive News Europe
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    PSA Group
    PSA Group says it is focusing on production of its Peugeot 3008 following a fire at supplier Recticel Group.

    PSA Group has delayed the launch of the Peugeot 5008 large SUV by two months to protect output of its strong-selling 3008 compact crossover. Both models were affected by a fire at urethane interior parts supplier Recticel Group's plant in the Czech Republic.

    Recticel's plant in Most was forced to halt all production following a Jan. 22 fire. The site is the sole supplier of a urethane skin product used on interior trim in some vehicles, including Peugeot's 3008 compact crossover, which is Peugeot's No. 4-selling model in Europe.

    Brussels-based Recticel declared force majeure following the fire and said Jan. 31 that its engineers and some staff were working to relaunch production, and it was working with automakers.

    “Recticel and its customers, supported by the affected OEMs PSA Peugeot Citroën, Renault, Daimler, BMW and Volkswagen, are cooperating to identify solutions and elaborate alternative production plans that will allow gradual restart of the production of parts, in order to minimize the disruption at the customers' assembly plants.”

    PSA had to temporarily stop production of the 3008 at its factory in Sochaux, eastern France, because of the shortage of parts from the affected plant. It is now focusing on the 3008.

    “We opted to take the exceptional measure of delaying the launch of the 5008 in order to give priority to meeting very strong demand for the new 3008,” a Peugeot spokesperson told Automotive News Europe. ANE is a sister publication of Plastics News.

    Since October, the 3008 has ranked as one of Europe's top 50 sellers, rising as high as 35th place in November's monthly sales with a volume of 9,804. The car finished December at No. 36 with 9,317 units sold, an increase of 77 percent on the same month in 2015, according to data from JATO Dynamics.

    The 5008, which was supposed to debut in early spring, will now arrive in late spring to early summer.

    Pre-orders for the 5008 have also been strong. PSA said last month that it had received 60,000 orders for the large SUV. That number exceeded the automaker's pre-launch targets by 70 percent.

    Another likely factor in PSA's decision to delay the 5008's launch is that the large SUV does not necessarily generate higher margins than the larger-volume 3008, Ian Fletcher, an analyst for IHS Automotive, told Automotive News Europe.

    “Given that the 5008 has a list price only a bit greater that the 3008, profits for the model could be marginal,” Fletcher said. “It might depend on whether customers spend more on the slightly bigger vehicle.”

    Demand for the Peugeot 3008 “appears to be huge at the moment and should continue to generate greater volumes than the 5008,” Fletcher said. “Diverting components to a vehicle that has yet to enter the market wouldn't help matters. I'm sure the move won't hurt in the long term as there are already plans to recoup production later in the year.”

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