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Cars

Peugeot to build 3rd China plant

(Agencies)
Updated: 2010-05-07 13:29
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SHANGHAI - French carmaker PSA Peugeot remains committed to building a third China plant as it speeds up expansion in the world's largest auto market, a company executive said on Friday.

PSA Peugeot, which already operates two facilities in China with partner Dongfeng Motor Group Co, aims to sell up to 400,000 cars in the country this year, approaching its annual capacity of 450,000 units, the executive told Reuters.

The automaker has set a target to sell 2 million vehicles annually by 2020, raising the company's market share in China to 10 percent from the current 3.5 percent, he said.

"PSA and Dongfeng are both committed to our third China plant. We are still discussing the details of the new facility with our partner," said the executive, who asked not to be named as he was not authorized to talk to the media.

The joint venture sold 120,300 cars in the first four months of this year, up 63 percent from a year earlier, he said.

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China, which eclipsed the United States as the world's largest auto market last year, has been a major bright spot for an industry hit by a sharp global downturn.

Many foreign automakers, including Volkswagen AG and Ford Motor , are stepping up their presence in the country.

Earlier in the week, PSA Peugeot reached an initial agreement to set up a separate 50-50 vehicle manufacturing venture with China Changan Automotive Group, the parent of Chongqing Changan Automobile Co.

Financial details of the venture, which will make light commercial vehicles and passenger cars, have yet to be decided.

One option would be to use Changan Group subsidiary Harbin Hafei Automobile Industry Group's existing facility in the southern boomtown of Shenzhen.

"Nothing has been decided yet. We are leaving our options open," the Peugeot executive said on Friday.

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