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China,France : PEUGEOT CITROEN builds its 4th factory in CHINA with shareholder DONGFENG in CHENGDU

July 7, 2014

PSA Peugeot Citroen chose to build its 4th factory in China with its shareholder Dongfeng at Chendgu, in west China.

The 2 partners own 3 factories in the country, at Wuhan in the centre with capacity to make 750,000 cars per year.

The construction of the plant will begin in the second half of 2014 and will increase the group's total Chinese capacity to 1 million vehicles in 2016.

The new facility focuses on making crossover vehicles, which is a cross between a car and a sport utility vehicle, and a 4-wheel-drive vehicles under the Peugeot and Citroen brands, and Fengshen, a brand owned by Dongfeng.

The Chinese government is encouraging car manufacturers to build new factories in the west to boost development of backward regions.

PSA and Dongfeng aim to sell more than 650,000 vehicles in China, as they are the biggest auto market in the world with the growth still growing rapidly.

This rises to 1.5 million by 2020 as a result of their increased cooperation which involved Dongfeng becoming a shareholder in PSA.

The group is struggling due to severe financial difficulties, and is focusing on China as it seeks to diversify itself away from the mature European market.

PSA has another joint venture with Changan at Shenzhen which makes the up-market Citroen DS cars.

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Source: TendersInfo (India)

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