French automaker opens new plant in China

 French automaker PSA Peugeot Citroen opened a new plant in central China, vowing to raise its share of the world’s biggest car market.

Inside a PSA factory. Reuters/Stringer

 The automaker opened its plant today in the city of Wuhan, which will have an annual production capacity of 300,000 vehicles. However the troubled car company did not include any figures for its investment.

PSA has been struggling to restructure itself back in France, following job cuts and the closure of a major plant.

Last year it reported a record loss of 5 billion euros and needed propping –up through government support.

Over the years, China in particular has become a major market for the world’s auto firms given its size and consistent growth, whereas the European market has slumped in recent years following the debt crisis.

The new plant is a joint venture between PSA and China’s Dongfeng Motor, is expected to boots the venture’s annual production capacity to between 450,000 and 600,000 vehicles from 2013, and eventually to 750,000 units in 2015, according to the statement issued by PSA.

The factory will produce two models, the Citroen C-Elysee and the Peugot 301. The increase in output will allow the joint venture to lift market shares to five percent in 2015.