French car giant Peugeot Citroen has become the latest major carmaker to team up with Changan Automotive after sealing a deal to build cars in China.
The 50:50 joint venture will produce 200,000 vehicles initially in Shenzhen, southern China, starting in the second half of 2012.
It will involve an initial investment of 8.4bn yuan ($1.2bn; £815m).
Changan, China's fourth largest carmaker, already has joint ventures with Ford, Volvo, Mazda and Suzuki.
An initial agreement between the new partners was signed in May.
The deal is designed to give the French carmaker a bigger share of the rapidly-growing Chinese car market, which is already the biggest in the world.
"It's a good move for Peugeot as a new venture could expand its product line and hopefully help it win more market share [in China]," said Zhang Xin at Guotai Securities.
Peugeot has an existing venture, dating back to the early 1990s, with Dongfeng Motor Group.
China is seen as an increasingly important market for global carmakers who suffered massive declines in demand in Europe and the US during the global downturn.