Located in Chengdu, the new plant will build Dongfeng Citroën, Dongfeng Peugeot and Dongfeng Fengshen-badged vehicles, primarily for the SUV and MPV segments. Total capacity will be 360,000 vehicles a year at full ramp-up, with the first car scheduled to roll off the line in late 2016.

DPCA’s current production base comprises three plants in Wuhan,which are running on two shifts for total potential capacity of 750,000 units a year.

With the fourth plant, production capacity will be lifted to more than one million units a year in 2016, in line with the Back in the Race plan’s objective of selling one million Peugeot and Citroën vehicles in China in 2017.

Earlier this year, the two firms signed a global strategic partnership with the objective of selling 1.5 million vehicles by 2020.

In the first nine months of 2014, DPCA sold 518,000 vehicles in China, an increase of 30% in a market up 11%. DPCA’s full-year objective is to sell more than 700,000 vehicles in China.

Carlos Tavares, chairman of the Managing Board of PSA Peugeot Citroën, said: ‘Construction of the Chengdu plant is a key step in PSA’s development in China, which is the Group’s largest market. This plant will allow DPCA to keep pace with its fantastic sales growth.Our joint venture is expected to sell more than 700,000 vehicles in 2014.’