WUHAN - French automaker Renault opened its first factory in China on Monday, in a joint venture with Dongfeng Motor Corp that has an initial production capacity of 150,000 cars per year.

The 7.76-billion-yuan ($1.18 billion) factory in Wuhan, capital of Central China's Hubei province, was approved by National Development and Reform Commission in December 2013.

The factory will mainly produce sports utility vehicles and its first product series, Kadjar, is expected to go on the market in March.

Renault's CEO Carlos Ghosn described the factory as a "big step" in developing the Renault brand in China and globally.

Ghosn said he was always optimistic about China's auto market, which, despite fluctuations, is still growing at 5 percent annually, meaning an increase of 1 million cars a year.

Dongfeng-Renault, though a latecomer, is expected to contribute greatly to China's auto market growth, he said.

The new joint venture will also boost the development of Dongfeng Motor Corp. and expand its product categories, said Dongfeng's board chairman Zhu Yanfeng.

Dongfeng already has joint ventures with PSA Peugeot Citroen, Honda, Nissan, Kia and Volvo.

Wuhan, dubbed as China's auto hub, has the largest number of car manufacturers among all Chinese cities.