(Adds details, Peugeot comment, background)
By Laurence Frost and Gilles Guillaume
PARIS, July 2 PSA Peugeot Citroen and
partner Dongfeng Motor Group received an official
green light on Wednesday to build their fourth factory in China,
the French carmaker said.
Peugeot said it had signed an agreement with local
authorities in Chengdu, central China, to begin work on the
plant, which will add production capacity of 300,000 vehicles a
year to the partnership's three existing factories.
"With this fourth plant, the production capacity of the DPCA
(joint venture) will increase to 1 million vehicles," Peugeot
said. Construction will begin this year on the plant, which is
scheduled to start production in 2016.
Peugeot struck a deal in February to sell matching 14.1
percent stakes to the French government and Dongfeng as part of
a 3 billion euro ($4.1 billion) capital increase for the
loss-making French carmaker.
The bailout also expanded the existing Peugeot-Dongfeng
joint venture with a 1.5 million vehicle sales goal for 2020 -
including some exports to southeast Asia.
The fourth Peugeot-Dongfeng plant will produce minivans and
sport utility vehicles for Peugeot, Citroen and Dongfeng's
Fengshen brand, the Paris-based carmaker said.
Peugeot sold 557,000 vehicles in China last year and is
targeting at least 700,000 combined sales this year through DPCA
and a second joint venture with Changan Automobile Group, which
manufactures cars for its premium DS brand.
($1 = 0.7331 Euros)
(Editing by James Regan)