PSA/Peugeot-Citroen’s China joint venture with Dongfeng Motor Corp. began construction of its fourth assembly plant — a factory intended to serve the country’s western regions.

Dongfeng Peugeot Citroen Automobile Co. will launch production at the Wuhan plant in 2016. The 12.3 billion yuan ($2 billion) facility will build up to 360,000 vehicles a year, according to a statement from PSA.

The factory will mainly produce SUVs and MPVs, which are in strong demand. The vehicles will be produced for the Peugeot, Citroen and Dongfeng car brands, the automaker said.

Established in 1992, Dongfeng Peugeot currently has three plants in the central China city of Wuhan with a combined production capacity of 600,000 units a year.

In September, Dongfeng Peugeot sold 64,138 vehicles in China, up 37 percent. It aims to sell 700,000 vehicles this year.

PSA also has a joint venture with China’s Chongqing Changan Automobile Co. Headquartered in the south China city of Shenzhen, the partnership expects to produce 200,000 vehicles next year.

Changan-PSA produces and sells Citroen DS models. Since September 2013, the partnership has sold 15,000 DS5 and DS6 models.