French carmaker PSA Group has signed a joint venture agreement with Uzbek vehicle manufacturer SC Uzavtosanoat (UzAuto) that will see Uzbekistan PCA make Peugeot and Citroën light commercial vehicles (LCVs) at a new plant in the free industrial zone of Jizzakh from 2019.

The plant will have an annual output of 16,000 vehicles for the local market and for export to the Middle East and Africa.

Capital investment in the project, which is equally shared by both parties, is around €30m ($33m).

“This LCV segment was the only non-occupied vehicle segment in Uzbekistan,” said Yusupov Rustam, deputy chairman of the board of UzAuto. “So this project is a significant qualitative leap in the development of the domestic automotive industry. And more globally, along with the increase of employment, this joint venture will positively contribute to the profitable growth of the Uzbekistan automotive industry.”

Uzbekistan is a closed market with virtually no sizeable imports. The joint venture has an exclusive licence to make LCVs there.

PSA Group said that within the first year of production it was aiming to source 50% of the inbound parts from local suppliers. They include 30 larger factories owned by SC Uzavtosanoat and more than 160 small to medium suppliers. Cabins and body-in-white units will be shipped from PSA plants in France.

PSA said it would provide technology and intellectual property, and contribute to the implementation of modern production processes and the organisation of training for employees.

Christophe Bergerand, Eurasia vice-president for PSA Group, commented: “This project is fully in line with our Push to Pass plan and this is a great opportunity for Groupe PSA to develop our LCV business and a profitable growth plan in the region. We appreciate the established constructive dialogue with the Uzbek teams and personal support of the president of Uzbekistan, Shavkat Mirziyoev, which was a determining factor in the creation of the joint venture."