The group pledged to inject 1 billion yuan ($146 million) and recruit 500 engineers for the center by 2010. Now already staffed by a team of 230 designers, digital mold architects and auto mold stylers of 10 nationalities, the center is also the first design-oriented technology center established by a global auto giant in China.

"We want to be a global player and obviously the China Tech Center will help us achieve the vision," Apode said.

About 85 percent of the staff are experienced Chinese workers in auto design and styling, with the other 15 percent coming from France, Italy, Spain and the United States, according to him.

"We are greatly impressed by everyone on the team as well as their achievements in the past year, especially the designer team, their competence, innovative spirit and always taking initiative," he said.

Designers and engineers in the center are entrusted with the creative task of designing new models for the group's global market, not just redesign or adaptation work to make mature models more suitable for local production, Vajsman said.

"The most important thing is that we offer them enough room for free innovation," he said. "We are not only introducing our European market-based experience to the center, but also encouraging European colleagues to learn more from their Chinese peers, such as different work styles and their fresh ideas and creative thinking."

In a move to attract more Chinese talent, the center signed an agreement of strategic cooperation with the College of Automotive Engineering of Tongji University last July to offer jobs or training opportunities in France to their graduates and teachers.

Vajsman admitted difficulties in recruiting the 500 engineers by 2010 because auto design, research and development, as well as auto marketing and sales, are brand new areas in China's burgeoning auto market. Still, he said he was confident because "an increasing number of graduates in automotive engineering and design from many Chinese universities could meet our demand in terms of number," Vajsman said.

Ample leg room

While PSA's joint venture in Wuhan produces cars for both Peugoet and Citroën models, the center is entrusted to design new models for both brands for Chinese and worldwide customers.

"We are dedicated to everything in the car industry, from all the range of vehicles which are going to be launched in China and worldwide to new engines and airbrakes," said Apode.

On the product line front, the group will continue to focus on the lower-medium and upper-medium segments of passenger cars in China, although Chinese local carmakers were the largest winners of the country's first-half auto sales booms boosted by stimulus policies that encouraged sales of small-engine cars and provided subsidies to car purchasing in rural areas.

"Sub-compact cars, where either domestic or foreign carmakers can hardly make a profit, don't have a future in China," said Vajsman.

"It was also because of the resemblance between U.S. and Chinese customers: They in general prefer sedans rather than hatchbacks or notchbacks for bigger and more comfortable space within the car," he said.

But PSA's China chief is thinking about how to cash in on China's craze for sport utility vehicles (SUVs).

He noticed that affluent urban residents are pushing demand for SUVs, as China witnesses a growing population fond of self travel.