PSA Peugeot Citroen to build new factory in China

French car maker PSA Peugeot Citroen will build a new manufacturing plant in the city of Chengduin in Western China with its new shareholder Dongfeng. It will be the company’s fourth plant in the country.

PSA Peugeot Citroen said in a statement the new plant for Dongfeng Peugeot Citroën Automobile (DPCA) will be built to support growth in its unit sales. Work on the facility will start later this year and the first car is scheduled to roll off the new assembly lines in late 2016.

DPCA’s current production base comprises three plants in Wuhan, which are running on two shifts for a total potential capacity of 750,000 units a year. With the fourth plant, production capacity will be lifted to one million units a year in 2016.

The company's full-year objective for 2014 is to sell more than 650,000 vehicles in China.

Last 28 March, Dongfeng and PSA Peugeot Citroën signed a global strategic partnership with the objective of selling 1.5 million vehicles by 2020.

According to The Financial Times, PSA Peugeot Citroën posted combined losses of €7bn ($10.2bn) in 2012 and 2013. As a result, it decided to restructure its European operations and focus on emerging markets, such as China.

Other car makers such as General Motors and Volkswagen are also relying on the Chinese market for growth and PSA Peugeot Citroen has ground to catch up on them.