PSA working on two new models for emerging economies

The product launches are expected to be part of its strategy to improve its profit margins in the next couple of years. Although the automaker is the second largest in Europe, the company is finding it difficult to expand in the developed and saturated market. On the other hand, emerging markets including China, India and other European countries offer significant growth potential.

The cars are not likely to be very expensive and according to French newspaper, the vehicles will include an entry-level compact car and a mid-size sedan codenamed "M3-M4". However, the company did not provide any further details about the launch time or the market size.

PSA had long held the discussions for joint development of a small car with Mitsubishi Motors along with the possibility of taking an equity stake in the Japanese automaker. However, the plans did not materialize but the companies announced in March 2010 that they will continue to work on joint development or cross promotion of their vehicles. The companies already have an agreement in place for remodelled i-MiEV electric cars and it is not difficult to imagine PSA tapping Mitsubishi's Asian network for the promotion of its new vehicles.