(Yicai) Oct. 20 -- Dongfeng Motor Group said it will purchase assets from its joint venture with France’s Peugeot for CNY1.7 billion (USD232.4 million) to enable the Chinese state-owned carmaker to make full use of its production capacity.

Dongfeng will buy land-use rights and buildings in Wuhan and Xiangyang in Hubei province from Dongfeng Peugeot Citroën Automobile, it said yesterday, adding that the JV will continue to use the factory under a 10-year lease.

The asset transfer includes DPCA's third plant in Wuhan, used to make Peugeot, Citroën, and Fukang cars, a source told Yicai.

Wuhan-based Dongfeng and Peugeot set up DPCA in 1992, with each owning half. The JV sold a record 710,000 cars in 2015, but sales have since tumbled, with only 50,000 sold in 2020 before a rebound to around 100,000 in the past two years.

DPCA shut its first factory in Wuhan in 2021 and last year sold its second one to Dongfeng Honda Automobile, a joint venture with Japan's Honda Motor. Its fourth plant in Chengdu, Sichuan province, will be its last remaining plant.

The strategic cooperation deal that Dongfeng and Stellantis, Peugeot's parent company, signed in 2019 and DPCA’s governance model will both remain in place, the Chinese automaker said.

Amsterdam-based Stellantis was formed in 2021 through the mega-merger of French auto giant PSA Group and Italian-American multinational Fiat Chrysler Automobiles. Stellantis will adopt a light-asset business model in China to cut fixed costs and focus on exports, it said last year.

DPCA's exports surged 182 percent to 37,104 vehicles in 2022 from a year earlier, according to Dongfeng’s data.

Editors: Dou Shicong, Martin Kadiev