SHANGHAI -- PSA/Peugeot-Citroen and China's Dongfeng Motor Group will jointly develop a platform for small cars for the Peugeot, Citroen, DS and Dongfeng brands.
The Common Modular Platform (CMP) will underpin the next generation of B (subcompact) and entry-level C (compact) cars for the brands, PSA said in a statement on Sunday. The statement marked the first anniversary of Dongfeng taking a 14 percent stake in PSA as part of a rescue package for the French automaker.
The platform will become operational starting in 2018 and can be used to develop as many as 20 models from sedans to SUVs, PSA and Dongfeng said in a presentation in Shanghai.
The platform is also known as EMP1 and is part of PSA's plans to build future passenger cars on two modular architectures. The second platform, EMP2, will be used for compact and midsized cars and already underpins the Peugeot 308 hatchback and Citroen C4 Picasso. EMP is short for Efficient Modular Platform.
The companies will spend 200 million euros ($216 million) on the CMP project with 60 percent of the expenditure committed by PSA, with the remaining 40 percent from Dongfeng. A team of Dongfeng engineers will be part of the project team based at PSA's main r&d center in Velizy, south of Paris.
The platform will enable PSA and Dongfeng to manufacture vehicles in their respective growth regions, PSA said. PSA will benefit from Dongfeng's supplier base in in China and southeast Asia, the statement said.
PSA aims to take 5 percent of the market in China with Dongfeng this year, with vehicle sales of 800,000, up from over 700,000 in 2014. It plans to more than double annual sales in China by 2020 to 1.5 million vehicles.
The automakers will open a joint technology center in Shanghai to develop cars for Asian markets.
Paris-based PSA is building its fourth manufacturing plant in China with Dongfeng to meet increasing demand. PSA's capacity in China will exceed 1 million units a year after the new plant starts operations in 2016.
PSA chief executive Carlos Tavares said the performance of its China joint venture with Dongfeng had been a big contributing factor to the company's faster-than-expected turnaround.
PSA last year posted its first annual profit since 2011 after closing a plant near Paris, cutting jobs and reducing spending on new car models. China surpassed France to become its biggest market.
Dongfeng and the French state invested a combined 1.05 billion euros last April in PSA, diluting the founding Peugeot's family's holding in the company.
Reuters and Bloomberg contributed to this report