Beijing (ZXZC)- Dongfeng Peugeot Citroën’s Wuhan second factory is reportedly taken over by Dongfeng Motor’s another joint venture, Dongfeng Honda, for electric vehicle production, according to a local media outlet.

Photo credit: Dongfeng Peugeot Citroën

The production equipment in the factory were all emptied for Dongfeng Honda’s convenience, a person close to Dongfeng Peugeot Citroën said. Dongfeng Honda is yet to respond to the matter.

The factory of interest has a designed production capacity of 150,000 vehicles. Although, the factory remained dormant, despite Dongfeng Peugeot Citroën’s rapidly growing sales performance.

Dongfeng Peugeot Citroën owns four production bases in China, with a total designed capacity of at least 1 million vehicles. However, in 2021, with doubled year-on-year sales result of 101,000 vehicles, Dongfeng Peugeot Citroën only needed 10% of its production capacity.

On the other hand, it is believed that Dongfeng Honda’s current production capacity cannot carry out its electrification transition.

According to Dongfeng Honda, it currently holds three production plants in China, with a designed capacity of 768,000 vehicles, which are in overload now. In 2019, Dongfeng Honda produced 791,000 vehicles, while in 2020, the number surged to 840,000 vehicles. Even under the chip supply logjam, the automaker still sold nearly 800,000 vehicles in 2021.

Moreover, as Dongfeng Honda announced, it planned to build a factory dedicated to its e:N battery-electric brand and start production in 2024. Taking over the Dongfeng Peugeot Citroën Wuhan second factory is a reasonable decision for the company.