PSA and Mitsubishi have finally signed a long-awaited joint venture agreement to produce vehicles in Russia.

The assembly plant will be located on a site in Kaluga, 180km (about 110 miles) south-west of Moscow. It will produce mid-range SUVs for Mitsubishi, Peugeot and Citroën as well as medium size Peugeot and Citroën vehicles, with an overall installed capacity of 160,000 vehicles.

The foundation stone will be laid on 10 June in Kaluga. Production is currently planned to start in 2011.

PSA said mid-range vehicles currently account for 50% of sales in Russia and that the SUV segment is one of the most buoyant there.

PSA and Mitsubishi already cooperate to produce Outlander-based SUVs for EU markets.