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French auto firm Renault SA on Monday said it signed a deal to build a joint-venture plant costing 7.76 billion yuan ($1.28 billion) to produce cars in the central Chinese province of Hubei.
Renault agreed to build the 50:50 joint-venture plant with the Dongfeng Motor Group Co, which is based in the provincial capital of Wuhan, the French company said.
The plant will have an initial designed production capacity of 150,000 cars annually from 2016 and the “potential for double that [capacity] in the near future,” it said.
The French firm said its sales of imported cars are expected to exceed 30,000 in China this year, a fraction of the sales enjoyed by major US and European rivals in the world’s largest auto market.
It has previously said it needs to produce cars locally to boost its China sales.
Renault, which has an alliance with Japan’s Nissan, also said earlier that it was considering production of electric vehilces with Dongfeng in Wuhan.
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