France's PSA Peugeot-Citroen Automobile Corp plans to build its second manufacturing plant in China to boost production and meet growing demand in the world's third-largest auto market.

The location is expected to be revealed in July after being approved by a board meeting of Dongfeng-Peugeot-Citroen Automobile Corp, PSA's only joint venture with Dongfeng Automobile Corp.

"The first phase of our existing facility is at full capacity now," said Guo Yanjun, a spokesman for the joint venture.

The Wuhan-based DPCA has started construction on the second phase of its first factory to double its production capacity to 300,000 units annually after it is completed.

"The second plant aims to produce the upcoming new models," Guo said. He did not give more details.

In order to catch up with foreign rivals such as General Motors Corp, Volkswagen AG and Toyota Motors Corp, PSA Group, the world's eighth largest automaker said it plans to introduce nine new models in China by 2009.

PSA Group - which produces the Fukang, Picasso, Elysse and Xsara under the Citroen brand as well as the Peugeot 206 and Peugeot 307 - holds a 5 percent market share in the Chinese auto market. GM holds 12 percent and Volkswagen holds nearly 20 percent.

The company established its auto finance company, Dongfeng Peugeot Citroen Auto Finance Company, under partnership with the Bank of China after being approved by the China Banking Regulatory Commission last week.

The finance company is capitalized at 500 million yuan (US$62.5 million).

Last year, the joint-venture's sales rose by 57.5 percent to 140,400 units from 89,100 in 2004.

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