PSA mulls new plant in China with Dongfeng

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RENNES, France -- PSA/Peugeot-Citroen is considering building a fourth car plant in China with its joint venture partner, Dongfeng Motor, to meet rising demand.

PSA said it is in discussions with Dongfeng to raise the joint venture's production capacity as part of the automaker's plans to boost sales in the country. ''It is logical to eventually build a fourth plant," a spokesman told Automotive News Europe.

PSA and Dongfeng operate three assembly plants in China at Wuhan. The spokesman did not say where the fourth plant would be located but media reports have said that Chengdu in the western part of China is being considered. The spokesman said the site-selection process is still ongoing.

The spokesman said the joint venture sold 550,000 units in 2013 and hopes to sell 650,000 units in 2014.

PSA has been hard hit by the European market slump and aims to internationalize its business. The company is seeking to raise funds underpinned by a 3.5 billion euro ($4.8 billion) capital increase that would see Dongfeng and the French government take stakes in the automaker.

PSA opened its first plant with it second Chinese joint venture partner, Changan Automobile Group, on Sept. 28 in Shenzhen. The plant has an annual capacity of 200,000 units and builds the Chinese version of the Citroen DS5.

You can reach Bruce Gain at bgain@crain.com.

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