Changan PSA joint venture announced it will begin producing vehicles in Shenzhen, Guangdong in 2013.
Changan PSA, with a registration capital of 4 billion yuan ($636.18 million), is owned 50%-50% by Changan and PSA Peugeot Citroen. The companies will make preliminary investments of 8.4 billion yuan ($1.34 billion), making the joint venture one of the most expensive in China. The companies expect an annual production of 200,000 vehicles and engines by 2015.
Changan PSA will also build a new research and development center and also establish its own brand product line to comply with the new government legislation. The work on the R&D center has already started and it is estimated that it will be opened in two years.
“Slow European growth means Peugeot needs to expand in China,” said PSA Peugeot Chief Executive Officer Philippe Varin. “There are savings we must make in some parts of the world while we develop others.”
PSA Peugeot Citroen and Changan will develop alternative energy vehicles, including the luxury Citroen DS 5 model in Shenzhen from 2013. PSA hopes that by 2014 it will manage to introduce the first car under its China-only brand.