Chinese automaker Dongfeng Motor and French partner PSA Peugeot Citroen announced plans to invest Euro 600 million (US$759 million) to double the production capacity of their JV and introduce new models by 2006.
The annual capacity of the JV, based in Wuhan, Hubei province, will increase to 300,000 units in 2006, up from the current 150,000 units, Dongfeng said.
The new capacity construction will cost RMB 2.82 billion (US$340.6 million) and comes after the two parent firms increased total capital of the JV by RMB 1 billion (US$120.7 million) to RMB 7 billion (US$845.4 million) in 2002.
Many Chinese and foreign companies are heavily investing to build new car manufacturing capacity in China, causing the sector to overheat.