PSA Peugeot plans to build third Dongfeng JV plant

Shanghai, May 7 (Gasgoo.com) French carmaker PSA Peugeot is still committed to building a third plant for its Chinese venture with Dongfeng Motor Group to accelerate expansion in the world's largest auto market, Reuters reported today.

PSA Peugeot aims to sell about 400,000 cars in China this year, approaching the annual capacity of 450,000 units of the current two facilities it operates with its Chinese partner Dongfeng Motor in Wuhan, eastern China.

"PSA and Dongfeng are both committed to our third China plant. We are still discussing the details of the new facility with our partner," said a PSA executive.

The joint venture, Dongfeng Peugeot Citroën Automobile Company Ltd., sold 120,300 cars in the first four months of this year, up 63% from a year earlier, he said.

The French automaker has set a target to sell 2 million vehicles annually in China by 2020, raising the company's share in the Chinese market to 10% from the current 3.5%.

Earlier this week, PSA Peugeot signed an initial agreement with Changan Automotive Group to form a 50-50 vehicle-manufacturing venture, its second JV in China.

The new venture may use Changan subsidiary Hafei Auto's existing plant in the southern city of Shenzhen to make light commercial vehicles and passenger cars.