Xu Bin, President of China South Industries Group Corporation, Changan's main shareholder, and Philippe Varin, Chairman of the PSA Peugeot Citroën Managing Board, have signed a contract to create an equally owned joint venture. The contract was signed on July 9 in Paris at a ceremony attended by Wu Bangguo, Chairman of the Standing Committee of the National People's Congress, Bernard Accoyer, President of the National Assembly of France and Gao Hucheng, Vice Minister of Commerce of the People's Republic of China
Pooling the expertise of two industry leaders, one Chinese and the other European, the joint venture will produce and market light commercial vehicles and passenger car line-ups in China. The partners will initially focus on introducing the Citroën DS line in China and launching a dedicated new brand for the venture. The contract also allows for the joint venture to market, at a later date, further vehicles under the partners' other brands, Peugeot and Changan.
Based in Shenzhen, in Guangdong Province, the joint venture will have initial annual production capacity of 200,000 vehicles and engines: these will meet the highest environmental standards. It will operate two production lines, through the renovation of an existing line and the building of a new line. Each will produce a specific range of vehicles. The joint venture will also have an R&D center.
The new company will be capitalized at RMB 4 billion, to be shared equally by the two partners, and backed by an initial investment of RMB 8.4 billion.
The first vehicle is scheduled to be launched in second-half 2012.
The joint venture remains subject to final approval by the relevant authorities.
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