Groupe PSA and SC Uzavtosanoat have announced an equally owned joint venture (JV) – Uzbekistan PCA – to build a production plant in the Free Industrial Zone of Jizzakh, 200km (120 miles) from Tashkent, in Uzbekistan, to produce Peugeot and Citroën LCVs for passenger and freight transport.

The charter capital of the new JV will be about EUR30m with equal shareholding. Total investment will be about EUR130m.

Groupe PSA will provide new technologies, intellectual property, and contribute to the implementation of modern production processes and organisation of training for employees, the two automakers said in a statement. The plant will operate in accordance with PSA Group systems in production, quality, purchasing, supply and sales.

The joint venture is aiming for at least 50% of local parts content in the first year of production by engaging domestic component parts manufacturers – 30 large factories owned by SC Uzavtosanoat and about 160 small and medium enterprises.

Production capacity is estimated at up to 16.000 vehicles per year, for sale in Uzbekistan and export.

With a population over 32m, there is a huge potential for further development of industrial production and growth of the automotive market in Uzbekistan, according to the JV partners.

"This LCV1 segment was the only non-occupied vehicle segment in Uzbekistan," said Yusupov Rustam, deputy chairman of the board of SC Uzavtosanoat. "So this project is a significant qualitative leap in the development of the domestic automotive industry. And more globally, along with the increase of employment, this joint venture will positively contribute to the profitable growth of the Uzbekistan automotive industry".

Christophe Bergerand, Eurasia vice-president for Groupe PSA said:  "This project is fully in line with our Push to Pass plan and this is a great opportunity for the group to develop our LCV business and profitable growth plan in the region. We appreciate the established constructive dialogue with the Uzbek teams and personal support of Uzbekistan president Shavkat Mirziyoev which was a determining factor in the creation of the joint venture."

SC Uzavtosanoat was established in March, 1994. The group currently comprises 75 large and medium-sized enterprises and companies, including companies with foreign capital and technology from South Korea, Turkey, Italy, Germany, Netherlands, the US and CIS countries. The main activity of the joint company is production of passenger cars, buses, trucks and components. In total, 24,000 people are employed, of which 5,000 have been trained at leading industrial companies worldwide.