France’s largest carmaker, PSA Peugeot Citroën (UG.PAR), has signed an initial agreement to set up a venture with China Changan Group (000625.SZ), Reuters reported. In a joint statement, the companies said the manufacturing venture will produce light commercial vehicles and cars, allowing Peugeot to enter the growing Chinese market for delivery vehicles, an area in which GM and Ford (F.NYSE) enjoy a head start. While Peugeot and Changan will each own 50% of the venture, sources say operations will be based in a Shenzhen factory owned by Harbin Hafei Automobile Industry Group (600178.SH), a carmaker that merged with Changan last year, Bloomberg reported. The companies are still in discussions over the financial details of the venture.
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