“Chang’an will soon host a major event in Shenzhen,” a source of the Chang’an Group told reporters last Saturday. The deal is almost near and its signing is expected to be completed this month.

The reason for this agreement to be signed in Shenzhen is that Hafei Auto has a production base here, which has been idle for two years, and the new joint venture between Chang’an and Hafei will no doubt use it in the early stages.

A top executive of Hafei said, according to the agreement reached by the China Weaponry Equipment Group and China Aviation Industry Corporation (AVIC) on the restructuring of the Chang’an Automotive Group, the base is at the disposal of the Chang’an Group. With the talks between Chang’an and Hafei drawing to a close, the new Chang’an Auto Group has decided to restart the Shenzhen base and make it the production base and operational headquarter of its joint venture with PSA.

In fact, looking back on the earlier cooperation between Hafei and PSA, the Hafei Shenzhen base has always been considered as the location for cooperation. Hafei built a Shenzhen base with an annual capacity of 100,000 units in September 2004. However, due to poor sales of the Saibo sedan, the production in the base was fully stopped in June 2007.