PSA Group, which operates well below production capacity in China, will lease one of its vehicle assembly plants in Wuhan to Nissan starting this year, according to a Chinese media report.
PSA will transfer the plant, along with workers at the factory, to Nissan around August, reported Lanjinger, a Beijing-based business news website.
The factory can produce 150,000 vehicles a year at full capacity.
It is one of three plants PSA operates in Wuhan. PSA also operates a plant in the southwest China city of Chengdu. The four plants, which belongs to PSA’s joint venture with China’s Dongfeng Motor Group, have combined annual production capacity of 990,000 vehicles.
Due to weak sales at PSA, the four factories operate significantly below capacity. In the first five months of the year, the PSA-Dongfeng partnership sold only 135,589 vehicles, a 7.2 percent increase from a year earlier.
In 2017, the partnership’s sales slumped 37 percent to 377,547, according to Dongfeng.
By contrast, Nissan is facing a shortage of production capacity in China as its local sales continue to growth.
The Japanese brand has four China assembly plants, with partner Dongfeng, which have an aggregate annual capacity of 1.1 million vehicles.
Through May, the Japanese brand delivered 429,832 vehicles in China, a rise of 10 percent from the same period last year.
In 2017, Nissan’s China sales advanced 11 percent to top 1.1 million.