French automaker Renault has signed a preliminary agreement to produce cars in China with domestic partner Dongfeng, a source close to the matter told AFP on Friday.
The deal marks "the end of an initial step ahead of an agreement," the source said, and would provide Renault with its first factory in the world's biggest car market.
Renault, which declined to comment on the information, said last year that it would begin to build cars in China after 2014.
The French group has already established a presence in China via partner car maker Nissan of Japan, which also works with Dongfeng.
In February, Renault boss Carlos Ghosn said the group might manufacture electric cars and sell some top of the line models in China.
Chinese press reports said Renault was looking to set up shop in Wuhan, central China, where Dongfeng already has an auto factory.
Ghosn might say more on the subject during the Beijing auto show, which opens its doors to media on April 23.