Manufacturing News

PSA, Dongfeng may build third China plant, reports Les Echos

PSA Peugeot Citroen and its Chinese partner Dongfeng Motor Group are considering plans to build a third assembly plant in China – a proposal that the joint venture will examine at its next board meeting in July, reports the French financial newspaper Les Echos.

PSA wants to gain an 8 percent share of the Chinese market, compared with 3.5 percent in 2009.

A PSA spokesman confirmed a third factory was being considered but was unable to confirm that it would be discussed at a board meeting in July. In May, sources close to the matter told Reuters that PSA aimed to start building the third plant before the end of this year.

Separately, Reuters reports that PSA is working on two new models for China and other emerging markets as it seeks to break out of its dependence on Europe.

The two new models are an entry-level small car known internally as "global small" for markets such as China and Latin America and a larger sedan that would be built in Spain, Les Echos reported. 

A PSA spokesman confirmed that the automaker is working on two new models for emerging countries for the longer term, but declined to offer details about volume targets or timing.

Japanese partner Mitsubishi Motors Corp. is leading development of the small car, Les Echos said. 

It would be sold on several continents and could be built in China, Japan, Thailand, India or Latin America. Its launch date is yet to be determined.

The PSA spokesman confirmed that the French carmaker and Mitsubishi were discussing the development of the new small car. 

The two automakers failed to agree on an expanded partnership in March, but noted at the time that they were discussing new joint ventures. The proposed small car is part of those talks.

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