Peugeot/Citroen and BMW/Mini To Share A New Small Engine

21st June, 2005

PSA Peugeot CitroŽn and BMW Group will today present the industrial plan for their cooperation, which is designed to produce a new family of small 4-cylinder petrol engines that will be used in both partnersí vehicles (Peugeot, CitroŽn and Mini). The cooperation strengthens high-level manufacturing expertise in Western Europe industrial facilities both in France and in the UK.

Engine parts will be machined exclusively at PSA Peugeot CitroŽnís Douvrin plant in Northern France, with engine assembly divided between each partnerís facilitiesóDouvrin for PSA Peugeot CitroŽn and Hams Hall in the UK for Minióto facilitate the logistics of supplying each manufacturerís car plants.

The cooperation has required the deployment of an efficient, flexible organisation tailored to meet the requirements of managing discrete assembly processes at two geographically separate production locations.

As part of the project, a complete production module will be brought on line in late 2005 at the FranÁaise de Mťcanique plant in Douvrin. The principle of the module is based on the development of a highly integrated, independent production unit that can easily be reproduced on other sites and brings together the machining lines for the main engine componentsócylinder head, crankcase, crankshaft and connecting rodóand the assembly lines. This efficient industrial organisation, based on the production of 2,500 units a day, represents an optimal solution in terms of efficiency and return on investment.

Covering a surface area of approximately 60,000 square metres, this first module required an investment of Ä330 million. It will be able to produce an engine every 26 seconds, regardless of the version. At full capacity, it will be run by 1,120 employees working in four shifts, who will have received 152,000 hours of training.

The Hams Hall plant will assemble engines for future variants of Mini. Its location near the BMW Groupís Oxford plant will allow for fast, accurate, flexible management of just-in-time-sequence deliveries, resulting in reduction in stock levels and delivery times.

PSA Peugeot CitroŽnís Charleville and Mulhouse Metallurgy Division plants will also be integrated into the industrial plan as suppliers of raw castings. A large number of innovations has been introduced in these plants, including:
- The lost foam process for the cylinder heads.
- Pressurised aluminium casings with cast-iron jackets inserted into the casting.
- Steel crankshafts with unmachined counterweights.
- Connecting rods forged using the double impression method.

Quality management is a high priority for both partners, which is why the quality of both machined and purchased parts is managed using standards common to BMW Group and PSA Peugeot CitroŽn. The partners are implementing a co-ordinated process to support full, real-time transparency between the two engine plants, in order to deal effectively with any type of quality issue that might arise.

In 2002, PSA Peugeot CitroŽn and BMW Group announced their intention to jointly develop and produce a new range of small, high-technology petrol engines, in high volumes and cost competitive conditions. The cooperation leverages both partnersí technological expertise as well as their in-depth understanding of large series production processes. Once at its maximum production capacity, the overall annual production will reach 1 million units.

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