PSA Peugeot Citroen and Changan Automotive Group will finalise on Friday a joint venture deal to produce vehicles in China, a PSA director said.

Peugeot and Changan signed a letter of intent to form the 50-50 venture in May that laid the groundwork for the deal.

A final accord will be signed on Friday, Jean-Marc Gales, director for Peugeot brands told AFP.

The partnership is to build light utility vehicles and passenger cars in the booming Chinese market.

Peugeot has a separate joint venture with Dongfeng Motor Corporation and their two factories in Wuhan, the capital of central China's Hubei province, have a production capacity of 450,000 vehicles.