The European Investment Bank (EIB) is lending FRF 1.3bn (ECU 200.3m(1)) to Automobiles Peugeot, Automobiles Citroën and SMAE (Société Mécanique Automobile de l'Est) for the development and production of a new range of diesel and petrol engines. This project is to be implemented at SMAE's plant on the Ennery site at Trémery (near Metz), in an area eligible for European regional development aid.

It involves the development and manufacture of a new generation of direct injection petrol (EN) and diesel engines (DW). The diesel engines will make use of a new generation of the "common rail" injection system, of which this will be the first large-scale industrial application in Europe. Compared with current direct injection diesel engines, this new technology represents a real advance in terms of environmental protection and will make the vehicles more pleasant to drive. It will provide a 10-15% fuel saving and will substantially reduce exhaust emissions.

The investment financed covers project development, installation of new production equipment and modernisation of other facilities. Production capacity for these new engines will be 6 000 petrol and diesel units per day on the site at Trémery. The factory is currently the largest diesel engine manufacturing plant in the world and one of the most competitive in Europe. This programme will help to strengthen yet further its industrial productivity and competitiveness. SMAE is the second largest employer in the region, with some 5 000 workers on the two sites in Trémery and Borny, and the new developments initiated by the PSA Peugeot Citroën Group will help to maintain employment in the region.

Developing less favoured regions and the competitiveness of European industries and promoting a better environment are priority objectives for the EIB. The cooperation it pursues with the automotive industry, and the PSA Peugeot Citroën Group in particular, is an excellent example of such action, which has involved the following projects in particular over recent years:

  • the Sevelnord factory, producing the Peugeot 806 and Citroën "Evasion" ("Synergy" in the UK) multi-purpose vehicles, as well as the Peugeot Expert and Citroën "Jumpy" vans ("Dispatch" in the UK);
  • the new paint shop using water-based paints at Peugeot's Poissy factory;
  • development of the new V6 engine on the Peugeot 406 and Citroën Xantia models;
  • the new automatic gearbox which will be fitted on both Peugeot and Citroën vehicles.

The finance contracts were signed on 26 February, at the Paris Head Office of PSA by Mr Jacques Calvet, Chairman of PSA Peugeot Citroën, and Sir Brian Unwin, President of the EIB. Sir Brian Unwin and Ms Ariane Obolensky, Vice-President, are to hold a breakfast press conference on 28 February, at which they will be presenting the Bank's activities in 1996 and the outlook for 1997.

(1) The conversion rates used by the Bank for statistical purposes during the current quarter are those obtaining on 31 December 1996, when ECU 1 = FRF 6.58, GBP 0.75, IEP 0.75, USD 1.26.