French carmaker PSA Peugeot Citroen said Thursday it plans to build its first factory in Russia in Kaluga, a city southwest of Moscow, to produce mid-sized vehicles.

The automaker has made a priority of expanding in Russia, where mid-sized vehicles account for 60 per cent of sales in the market, the company said in a statement.

PSA Peugeot Citroen plans to sell 100,000 Peugeot and Citroen brand vehicles in Russia in 2010, and ramp up to 300,000 a year in subsequent years, it said.