PSA Peugeot Citroen and Toyota - who have been building small cars together in the Czech Republic since 2002 - are discussing joint production at the Sevelnord plant in northern France, according to French news agency AFP.

Fiat and PSA currently have a joint venture at Sevelnord building the companies’ people carriers; Fiat is due to leave the partnership in 2017.

Sevelnord is close to Toyota’s factory in Valenciennes where the Yaris is built so the company already has a strong supplier base in the area.

AFP quoted union official Ludovic Bouvier who said that Toyota was a more likey partner than Mitsubishi with whom Peugeot has already been in talks. Peugeot and Mitsubishi have a Russian joint venture assembly plant.

The companies have not commented on the reports but AFP said an announcement could be made as soon as June.