Peugeot teams up with Hafei

French carmaker PSA Peugeot Citroen plans to assemble high-end vans with China's main mini-van producer Hafei Automobile to further explore the world's second-biggest vehicle market.

According to a memorandum of understanding signed on Friday in Beijing, the two parties will create a 50-50 joint venture based on Hafei's existing plant in the southern city of Shenzhen.

Denis Duchesne, CEO of the French carmaker's China operations, said the venture would make 10-seater and smaller vans under the Peugeot, Citroen and Hafei badges with an initial capacity of 100,000 units a year.