PSA Peugeot Citroen is to build its fourth factory in China in collaboration with Dongfeng in the Western Chinese town of Chengdu.
There are already three factories in China owned by the two companies with a combined capacity of 750,000 cars per annum, based in Wuhan.
The fourth plant will boost car making capacity to one million vehicles by 2016 and will produce what is known as 'crossover vehicles'. In other words, a cross between a car and a sport utility, in addition to four-wheel drive Peugeots and Citroens and Fengshen (a brand owned by Dongfeng).
The reason behind the partnership building its fourth plant in Western China is the Chinese Government's drive to boost the economy of what is regarded as a backward region of China.
For PSA and Dongfeng the plan is simple: sell more than 650,000 vehicles in China in 2014 and boost sales to 1.5 million by 2020.
In addition to its partnership with Dongfeng (the company is now a PSA shareholder) PSA is engaged in a joint venture with the Shenzhen-based Changan Group. Shenzhen manufactures the Citroen DS car.