Metalnewsnet 11 May ：

French carmaker PSA Peugeot Citroen and China's fourth largest automaker Chang'an Automobile Group announced last week that they have signed a letter of intent for the creation of a 50:50 joint venture in China.

According to the deal signed on May 4 in Chongqing, the possible joint venture will produce environmentally friendly light commercial vehicles and passenger cars.

Mr Alexis Vannier communications director for Peugeot-Citroen told China Daily that the new facility will complement both parties' existing ventures in China, without direct competition.

He however refused to provide more information, saying both parties are still discussing the details.

Mr Claude Vajsman CEO of Peugeot's China said that the new venture will help fuel Peugeot-Citroen's ambition of selling 2 million vehicles in China annually while grabbing 10% of the market by 2020. To achieve the target, we will further strengthen our existing partnership with Dongfeng, by breaking ground on our third plant in the near future and launching at least one new model under the two brands of Peugeot and Citroen respectively every year.”

The company currently controls around 3.5% of China's passenger car market.

Chang'an currently has a three way tie up with Ford and Mazda Motor Corp, which aims to sell more than 2.6 million vehicles annually by 2012.

Peugeot-Citroen also has a joint venture with Dongfeng Automobile Co Ltd, China's third largest automaker.

( from China Daily)