Dongfeng PSA JV may decide on 3rd plant next month

Shanghai, June 18 (Gasgoo.com) French carmaker PSA Peugeot and its Chinese partner Dongfeng Motor Group are considering whether to build a third factory in China and their joint venture will examine the matter at its next board meeting in July, Reuters reported today.

Sources close to the matter said last month that PSA aimed to start building the third plant for its Chinese venture by the end of this year, as part of its to accelerate expansion in the world's largest auto market.

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 plants of a joint venture it operates with Dongfeng Motor in Wuhan, central China.

The joint venture, Dongfeng Peugeot Citroen Automobile Co., Ltd., sold 120,300 cars in the first four months of this year, up 63% from a year earlier. PSA expects its annual China sales to hit 2 million vehicles by 2020, raising the company's share in the Chinese market to 10% from last year's 3.5%.

"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 in early May, according to Reuters.

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%.

Last month, PSA Peugeot signed an initial agreement with Changan Automobile Group to form a 50-50 vehicle-manufacturing venture, its second joint venture in China.