BEIJING China's Changan Automobile Group is selling its 50 percent stake in a car venture with PSA Peugeot Citroen (PEUP.PA) to its listed unit, Chongqing Changan Automobile Co (000625.SZ), sources with direct knowledge of the matter said, in a sale worth 2 billion yuan ($320 million).
An executive at the Chinese parent company said the move was aimed at streamlining its business and the group's relationship with the French car maker remains unchanged. He declined to be identified because he is not allowed to talk to the media.
The value of the transaction was released in a statement to a property exchange.
PSA Peugeot manufactures Citroen's upscale DS models through the venture with Changan, which has an annual production capacity of 200,000 vehicles. The French automaker also has a partnership with Dongfeng Motor Group Co (0489.HK).
China's luxury car market is dominated by BMW (BMWG.DE), Daimler AG's (DAIGn.DE) Mercedes-Benz and Audi AG.
A Peugeot spokeswoman in China said the shift in ownership will not affect its operation. Media relations officials at Changan could not be reached for comment.
The French car maker, which is struggling in Europe, aims to expand annual China sales to 950,000 by 2015, up from the 404,000 sold last year, its Asia head Gregoire Olivier told Reuters in an interview in June.
Changan also makes cars in partnership with Ford Motor Co (F.N) and Mazda Motor Corp (7261.T). All foreign car makers producing cars in China must do so through a joint venture with a local firm.
($1 = 6.2273 Chinese yuan)
(Reporting by Fang Yan in BEIJING and Kazunori Takada in SHANGHAI; Editing by Edwina Gibbs)