PSA Group is extending a joint venture contract with Chinese partner Dongfeng Motor Group by 10 years to 2037.
The move is intended to ease concerns about the future of the partnership, Dongfeng said last week.
Dongfeng Peugeot Citroen Automobile (DPCA) was established in the central China city of Wuhan in 1992 as a 50-50 partnership between Dongfeng and PSA to build vehicles for Peugeot and Citroen brands.
After peaking at some 700,000 vehicles in 2015, the partnership’s annual sales have steadily declined, dropping to below 113,600 in 2019.
In the first five months of this year, deliveries shrank 67 percent to 17,876, according to data released by Dongfeng, a Hong Kong-listed company.
PSA, aiming to revive the alliance, is steering the rollout 14 new and refreshed products over the next three years, Dongfeng said.
DPCA has launched sales of the redesigned Peugeot 2008 crossover and the upgraded Citroen C3 sedan.
In addition, PSA plans to allow the joint venture, which can produce up to 700,000 vehicles a year, to build some future products for export, Dongfeng said, without divulging details about the plan.
DPCA is PSA’s sole production venture in China; last year, it shuttered a joint venture with Changan Automobile.
Changan PSA was incorporated in 2011 in the south China city of Shenzhen. With annual production capacity of 200,000 vehicles, it failed to achieve meaningful volume after launching output in 2013.