Chinese car maker Changan has confirmed that it is in talks with PSA Peugeot Citroen over a new commercial vehicle and passenger car joint venture in China.

Zhang Baolin told reports at the Beijing Auto Show which opened today that the two companies have had negotiations over the cooperation, adding: “There is likely to be a result soon.”

He gave no further details although Changan vice-president Du Yi earlier told Dow Jones Newswires that the companies were negotiating to set up a 50-50 commercial vehicle joint venture and an agreement was expected in one to two months.

The new partnership will initially build cars in the southern Chinese city of Shenzhen. PSA did not comment on the talks. Previous Chinese media reports said the joint venture would make small cars and commercial vehicles under the Peugeot and Citroen brands.

Peugeot currently has a joint venture with Dongfeng Motor Group and announced in January that it plans to increase sales in China by 30% this year, double the growth rate for the country’s whole market.