As it moves to more than double its share in the world’s largest car market, PSA Peugeot Citroen aims to start building its third China plant with JV partner Dongfeng Motor by the end of this year, two sources were quoted as saying on Wednesday.
PSA, which already operates two facilities in China with Dongfeng, wants to sell up to 400,000 cars in the country this year, approaching its annual capacity of 450,000 units.
“The two partners want to build the new plant within the year and are working out the details now,” a source with direct knowledge told Reuters.
The plant, with annual capacity of between 150,000 to 200,000 units, is scheduled to be up and running by 2012, the source said.
However, the greenfield site and product mix have yet to be finalised though the central city of Wuhan, where the two existing plants are based, is among the options, another source familiar with the matter told the news agency.
“Dongfeng and PSA are still selecting sites now. Things will be firmed up in the next few months,” the source added.
PSA Peugeot declined to comment and Dongfeng executives could not be immediately reached.
PSA earlier this month reached an initial agreement to set up a 50-50 venture with the parent of Chongqing Changan Automobile to make light commercial vehicles and passenger cars.
“PSA has been a relatively conservative player in China compared with GM and others. There seems to be an adjustment in its strategy now,” Huatai Securities analyst Chen Liang told Reuters. “It’s a good move as no one can afford to be missing out on the China market.”