According to an Automotive News China report, Dongfeng Peugeot Citroen Automobile Co, the 50-50 joint venture between PSA Peugeot Citroen and Dongfeng Motor Corp, is considering a proposal to build its fourth assembly plant in China.

In a statement issued last week, the JV said, "At present, the plan for a fourth plant has already been put on the agenda."

In February, Dongfeng agreed to invest 800 million euros (Rs 6,560 crore) for a 14 percent stake in PSA to ease the French carmaker's financial troubles.

"With the implementation of the global strategic alliance between Dongfeng and PSA, Dongfeng Peugeot is embracing a golden opportunity to accelerate its development," the joint venture said.

Dongfeng Peugeot now has three plants in the central China city of Wuhan with a cumulative manufacturing capacity of 600,000 units per annum.

Dongfeng Peugeot Citroen Automobile will run out of spare capacity if it maintains its current sales growth. In the first three months of 2014, it sold 165,158 Peugeot and Citroen vehicles, up 16 percent year-on-year. The partnership aims to sell 650,000 vehicles this year, up from 550,000 units in 2013.

PSA also has a partnership with Chongqing Changan Automobile Co in the south China city of Shenzhen, which began selling the locally built Citroen DS5 last year.