PSA-Dongfeng cleared by local authorities to build 4th assembly plant
PSA Peugeot Citroen has signed an agreement with local authorities in China to proceed with the construction of a fourth factory with partner Dongfeng Motor Group Co., the French carmaker said.
The joint venture currently operates three plants in Wuhan with a total capacity of 750,000 units a year. With the fourth plant, annual production capacity will rise to 1 million units in 2016, PSA said.
In February, PSA struck a deal to sell matching 14.1 percent stakes to the French government and Dongfeng as part of a 3 billion euro ($4.1 billion) capital increase for the money-losing French carmaker.
The bailout also expanded the existing PSA-Dongfeng joint venture with a 1.5 million vehicle sales goal for 2020 -- including some exports to Southeast Asia.
PSA sold 557,000 vehicles in China last year and is targeting at least 700,000 combined sales this year through DPCA and a second joint venture with Changan Automobile Group, which manufactures cars for its premium DS brand.