Peugeot and China's Changan to sign joint venture: PSA
France's PSA Peugeot Citroen and China's Changan Automotive Group will on Friday sign a joint venture deal to produce vehicles in the world's top auto market, a PSA director said.
Peugeot, Europe's number two carmaker in terms of sales behind Germany's Volkswagen, and Changan signed a letter of intent to form the 50-50 venture in May that laid the groundwork for the deal.
A final accord will be signed on Friday, Jean-Marc Gales, director for Peugeot brands said on Wednesday on the sidelines of a meeting to present the latest sales figures.
The partnership is to build light utility vehicles and passenger cars in the booming Chinese market.
Car sales in China hit 13.64 million units in 2009, overtaking the United States as the world's number one auto market.
"Asia is a priority," said Gales. "Two-thirds of world growth in the next ten years will be in Asia... These are priority markets for us."
Beijing has offered incentives such as lower purchase taxes and subsidies for fuel-efficient vehicles in rural areas to boost the sector.
Peugeot has a separate joint venture with Dongfeng Motor Corporation and their two factories in Wuhan, the capital of central China's Hubei province, have a production capacity of 450,000 vehicles.
PSA's objective is to double its market share over the next six years, from 4 percent to 8 percent, said Gales.
© 2010 AFP