PSA Peugeot said it remains committed to building a third China plant as it speeds up expansion in what has become the world’s largest car market.

PSA already has two facilities in China with partner Dongfeng Motor Group and aims to sell up to 400,000 cars there this year, close to its annual capacity of 450,000 units. The company plans to sell 2m vehicles annually by 2020, raising its market share in China from 3.5% to 10%.

The French carmaker and its Chinese partner are said to be discussing the details of a new facility. The joint venture sold 120,300 cars in the first four months of this year, up 63% on 2009.

Earlier this week, PSA reached an initial agreement to set up a separate 50-50 vehicle manufacturing venture with China Changan Automotive Group, the parent of Chongqing Changan Automobile.

Financial details of the venture, which will make light commercial vehicles and passenger cars, have yet to be decided. One option is to use Changan subsidiary Harbin Hafei Automobile Industry Group’s existing facility in the southern boom town of Shenzhen.