Sergio Marchionne, CEO of Fiat, Jean-Martin Folz, CEO of PSA Peugeot Citroën, Mustafa V. Koc, Chairman of Koc Holding and Tofas, and Diego Avesani, CEO of Tofas, have signed a cooperation agreement to jointly develop and produce small entry-level light commercial vehicles for the European market.

Scheduled for rollout in 2008, the new vehicles will extend the current Fiat, Peugeot and Citroën product ranges.

In response to anticipated changes in the entry level segment of the European light commercial vehicle market, PSA Peugeot Citroën, Fiat and Tofas are introducing an innovative small vehicle concept to extend their current commercial vehicle lineups.

The three partners’ objective is to design a compact, economical, multi-purpose commercial vehicle that will be modern, sturdy and attractive.

Powered by especially fuel-efficient engines, it will enable the partners to proactively meet the expected growth in the entry-level segment with a range of particularly affordable vehicles. The new models will deliver effective environmental and mobility solutions for business use in metropolitan areas, as well as excellent highway performance.

With the active support of PSA Peugeot Citroën and Fiat, Tofas will be in charge of coordinating the development and production of the future models based on a new platform.

The vehicles will be produced at Tofas’ plant in Bursa, Turkey. The annual production capacity will be of 135,000 units, of which two-thirds for PSA Peugeot Citroën and one-third for Fiat including Tofas.

Total investment, including research and development and production start-up costs, is estimated at roughly 350 million euro.