French auto giant PSA Peugeot Citroen said yesterday it will build a plant in China with its partner Dongfeng Motor to boost its presence in the world’s biggest and fastest-growing car market.

The new plant will be in Wuhan, central China, and will have initial annual capacity of 150,000 vehicles when it comes on-stream in 2013, said a statement issued to mark a visit to China by PSA head Philippe Varin.

The plant will increase total PSA capacity in China through its joint ventures with Dongfeng Motor to 750,000 vehicles by 2015, up from the current 450,000 units.

PSA said it will also introduce at least one new model a year in China and boost its dealership network to increase business in its second most important market.

The new cars will be more environment-friendly and will include hybrid petrol-electric models, it said, adding that combined, the package would allow its Dongfeng joint venture to win five per cent of the Chinese market by 2015.

In July, PSA formally agreed a $1.2 billion joint venture with Chinese group Changan Automobile to build 200,000 cars a year initially at a plant in Shenzhen, just across from Hong Kong in southern China.

Auto sales in China hit 9.02 million in the first half of 2010, a year-on-year rise of 48 per cent, according to Chinese figures, as the market booms on the back of sustained economic growth and development.

Western and Japanese auto firms all have major plants and interests in China, attracted by its growth prospects.