LION’S VISION: French carmaker PSA Peugeot Citroën aspires to be a mainstream market player in China (ZHANG KAIXIN)

American tastes dominated the global automobile market for more than a century, but the shifting automotive landscape may see this focus move to the other end of the Pacific Ocean. In the first half of this year, China outperformed the United States, taking the top spot as the world's largest auto market.

Among many other auto giants, Europe's second-largest carmaker, France's PSA Peugeot Citroën, is taking steps to allow the Chinese market to deploy its global strategy.

The European group opened its first technical and styling center outside France at the China Tech Center in Shanghai last September in a bid to satisfy local demand and cut costs by taking advantage of China's growing automotive design and engineering labor force.

"We are totally convinced that China is the cradle of the auto industry in the 21st century," said Claude Vajsman, President of PSA China business during an interview with Beijing Review in Shanghai on July 25. "Being 'the workshop of the world' is not the future of China's auto industry and instead it should be a future of independent research and innovation."

As their latest move, the group is considering the establishment of a second joint venture to boost overseas sales and gain a larger share in the world's fastest-growing auto market.

Lion's share

"Everyone in the auto industry knows that sooner or later China is going to be the biggest auto market," said Eric Apode, General Manager of PSA's China Tech Center. "When taking into account the per-capita car ownership, we know obviously China will keep growing in the future."

Private car ownership in China equates to less than 20 cars per 1,000 people—one of the lowest rates in the world.

Strong sales in China and Russia helped to balance a stagnant performance in the European market for PSA in the year's first half. The group sold a total of 117,300 vehicles in China, up 13.8 percent, but posted a net loss of 962 million euro ($1.37 billion) on the global sales slump.

The French carmaker has been in China since 1992 but fallen behind international rivals such as General Motors and Volkswagen.

In order to enhance its market share, the group launched more models this year, including Peugeot 207 hatchback and saloon, and Citroën's C-Quatre and C-Elysée.

In addition to the China Tech Center, the construction of a state-of-the-art platform in Wuhan was finished in June, ready for high-end models, such as Citroën's C5, to roll off the line later this year. Meanwhile, PSA is considering a second joint venture with Chinese carmaker Harbin Hafei Automobile Industry Group Co. Ltd., one of the options to increase its presence and rival major competitors in the market.

They signed a memorandum of understanding on June 29 to start a feasibility study of a 50-50 joint venture creation, to manufacture small people movers, mass transit systems generally serving relatively small areas such as airports or theme parks, in Shenzhen.

China's design competence

The establishment of the new center, part of PSA's 2010 blueprint, aims to integrate Chinese elements into the design and styling of its vehicles to better serve the demands of Chinese customers while strengthening its engineering capability for faster expansion on the Chinese mainland.

The group, still heavily reliant on European sales, set a midterm sales target of 1 million units in China by 2015 in order to be a mainstream player in China.