Peugeot halts Slovak output on weak demand

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January 28, 2013 10:28 PM EST

France's carmaker PSA Peugeot Citroen halted production in Slovakia for the day on Monday and will add another four stoppage days next month in response to weak demand across Europe, the Slovak unit said.

Peugeot, which is cutting some 10,000 jobs and closing a domestic plant in France, is one of the key exporters in the central European country where growth is driven almost solely by the automotive production.

The carmaker, operating an assembly plant in the western Slovak town of Trnava where it makes the Peugeot 207 and Citroen C3 Picasso models, still expects production in Slovakia this year to exceed the 2012 output of almost 215,000 cars.

"Demand for new cars in Europe is continuously falling. Decreasing trends in sales transform into production cuts by several carmakers," PSA Peugeot Citroen Slovakia wrote in an emailed statement.

The Trnava plant has an annual production capacity of 300,000 vehicles.

The euro zone country's automotive industry is centered around assembly plants of Germany's Volkswagen , South Korea's Kia Motors Corp. <000270.KS> and Peugeot.

Any production disruption in the sector could have a significant impact on the economy's performance, expected by the finance ministry to slow its expansion to 2.1 percent in 2013 from 2.5 percent this year on waning demand for its exports.

(Reporting by Martin Santa; Editing by Mike Nesbit)

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