renault talisman ghosn.automotiveIT

Renault CEO Ghosn (center) confirmed his ambitions in China at the launch of the new Talisman at the 2012 Beijing auto show in April (Photo: Renault)

Renault and its local partner Dongfeng are planning to build cars in China, according to China Business News.

The news report, which was cited by the semi-official China Daily newspaper, said the two firms plan to invest about 1.0 billion dlrs in a car plant in the central Chinese province of Hubei.

The plant, which will be based at a factory previously used by Renault and a local partner in the mid-1990s, would have initial capacity of 200,000 cars a year.

Renault is one of the few car companies in China that doesn't build cars there. But with the French group's core European market in decline, a bigger presence in China is a logical move.

Growth in the Chinese market, the biggest in the world, has slowed recently, but it still outpaces most other major car markets.

In April, Renault launched a new flagship sedan in China, the Talisman, which is built in Korea at Renault Samsung Motors. Renault CEO Carlos Ghosn used the occasion to say that the new model  "underlines the importance Renault attaches to the Chinese market and our confidence in growth there."

Renault wants to double its sales in China this year to 42,000 units and has set a target of 48,000 cars for 2013. It has also embarked on an ambitious program to increase the number of Renault dealerships in China from 80 in 2011 to 170 in 2014.

Foreign carmakers all need a domestic partner to engage in automotive business in China. Dongfeng also operates car ventures with Renault's alliance partner Nissan and with Honda and PSA/Peugeot-Citroen.