PSA's second plant in China to produce mini-MPVs

Shanghai. September 3 (Gasgoo.com)–PSA Peugeot-Citroën and Chinese carmaker Hafei is expected to reach a final joint venture deal by the end of this year. The projected joint venture will produce cars carrying both PSA Peugeot-Citroën and Hafei badges, according to a company official.

"The double brands strategy is a key topic in our negotiations, and we may leverage technical resources from PSA to develop new passenger vehicles," said an unnamed Hafei official. "We already have two new passenger vehicles under the code name Hafei 8 and Fafei 9 to go on sale this year."

PSA Peugeot-Citroën and Hafei signed a memorandum of understanding late June this year on feasibility of starting a 50-50 joint venture. The new venture will manufacture a range of passenger vehicles with less than ten seats for the Chinese market. The mini-MPVs will be assembled at Hafei's southern plant in Shenzhen and will compete locally with similar models from Chang'an and SAIC-GM-Wuling. Annual production for the first year is expected to reach 100,000 units.

Citroën C4 sedan

Before its partnership with HF Motors, the French automaker was among the few global automakers that have only one joint venture in China. It currently operates in China through another joint-venture with Dongfeng Motors, the third largest carmaker in China.

The two sides have no plans to export any of the vehicles outside of China but overseas media speculate that cars produced by this joint venture may one day be sold in Europe with Peugeot or Citroën badges.