WUHAN, CHINA – As it looks to tap into the world's biggest auto market, Renault SA ( IW 1000/82) opened its first car factory in China on February 1. It's the last major manufacturer to set up a plant in the country. 

The $1.2-billion facility in Wuhan, a carmaking hub in the central province of Hubei, is a joint venture with Chinese manufacturer Dongfeng and will have an initial production capacity of 150,000 vehicles a year.

China's total auto sales grew at their weakest pace in three years in 2015, as a slowing economy and a stock market rout slammed into demand.

But the country remains "a growth driver for the global auto industry," Renault CEO Carlos Ghosn said at the inauguration.

The factory was a "first big step" for the development of the Dongfeng-Renault joint venture and for the growth of Renault, he added.

China is crucial to foreign auto makers, both as the world's largest market and a key source of revenue outside Europe and the United States, but until now, the French firm has largely allowed its Japanese alliance partner Nissan to take the lead.

Renault sold a mere 15,850 vehicles in China last year, down 50% on 2014, mostly SUVs built in South Korea. That gave it a market share of less than 0.1%.

But Ghosn said the country was a "core part of Renault’s strategic plan," and that its long-term goal was a market share of an ambitious 3.5%.