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French carmaker PSA Peugeot Citroen's joint venture with Dongfeng Motor Corp expects its sales to grow by more than 40 percent this year, helped by the newly-launched Peugeot 206.

 

The venture in Central China's Hubei Province aims to sell 200,000 vehicles in 2006, up from 140,000 units on the previous 12 months, said Liu Weidong, the venture's general manager.

 

He made the comments at a press conference for the unveiling of the 1.6-liter Peugeot 206 on Friday in Beijing.

 

The expected sales this year will include 80,000 Peugeot vehicles and 120,000 units under the Citroen brand, Liu said.

 

The venture's 2005 sales surged by 57 percent from 2004, he said.

 

It represented a major rebound from an almost 14 percent tumble in its sales in 2004 on the previous period.

 

The venture reported 540 million yuan (US$66.7 million) in losses in 2004 due to sluggish sales and high costs.

 

Liu did not reveal the venture's 2005 financial results on Friday.

 

According to Saint Geours, global managing director of PSA Peugeot Citroen's Peugeot unit, the venture aims to sell more than 35,000 Peugeot 206s this year.

 

The Peugeot 206 will be available on the market in March and its prices will be revealed later this month.

 

Liu said that the Peugeot 206 would be the first of the venture's three new products this year. He said two new Citroen models would be launched later this year.

 

The venture now makes the Peugeot 307 as well as the Citroen Fukang, Elysee, Picasso and Xsara.

 

Geours said that Peugeot expected to boost its sales in China to 100,000 units next year.

 

The venture hopes to have 220 Peugeot sales stores in China by the end of this year, up from 137 at present.

 

Last year, it sold 40,000 Peugeot 307 sedans.

 

Peugeot began to produce pickups in China with Guangzhou Automobile Group in the late 1980s. However, it halted the production in 1997 due to sluggish sales. It restarted China production in 2004 by launching the Peugeot 307 at the base in Hubei.

 

Liu said they planned to cut costs by 1 billion yuan (US$123 million) this year by using more China-made parts in Peugeot and Citroen vehicles and improving management. In 2005, bosses cut costs by 1.2 billion yuan (US$148 million).

 

(China Daily January 7, 2006)