Dongfeng Peugeot to Build New 307 Sedan in China

PARIS – Dongfeng Peugeot Citroen Automobiles Co. Ltd. expects to have 80 exclusive dealerships in operation this summer when the new 307 sedan begins production in China.

The new Peugeot will make its world debut at the Geneva auto show in March.

Concentrating on China's 52 largest cities, the joint venture’s sales goal is 15,000 units this year, and 50,000 annually in 2005. The company, located in Wuhan, will produce the sedan for the Chinese market only.

In Europe, PSA Peugeot Citroen sells the 307 as a 3-door, 5-door, station wagon and coupe-cabriolet. While none of these are planned for export to China, they will be available to customers who wish to pay the import duty. The Chinese 307 is 1.6 ins. (4 cm) longer than the European station wagon.

The 307 sedan will mark the first time PSA has produced a new model outside of Europe. "It shows the importance we accord to the Chinese market," says a company spokesman.

The 307 will compete in China’s medium-car segment, which accounted for 30% of the 2003 passenger-car market of 2 million units. In Europe, the segment accounts for about a third of sales but most are hatchbacks.

In China, 90% of medium-size cars are 4-door, 3-box sedans. In spite of the relatively small total volume anticipated, Dongfeng Peugeot will offer customers a wide variety of choices: five interior trims, three finish levels, two gasoline engines (1.6L and 2L) and two transmissions: automatic or manual.

More than 1.5 million 307s have been built at the two French factories,

Sochaux and Mulhouse, and the 5-door version will go into production this year in Argentina, as well.

The Wuhan plant, which up to now only has produced Citroens, will add the

Peugeot 206 next year. A €600 million ($771 million) expansion plan agreed in January will double the plant's capacity to 300,000 units annually in 2006. (See related data: Peugeot Brand to Stage Comeback in China)

This year, even with the addition of the 307, Dongfeng Peugeot only expects to build 140,000 vehicles on two shifts.