Dongfeng still valuing benefits of Peugeot investment image

A top Dongfeng executive disclosed the Chinese automaker is still considering the benefits of investing in the ailing PSA Peugeot Citroen, signaling that a deal with the French carmaker could come in the long run.

We all know about the report that PSA is readying a 3 billion euro ($4 billion) capital increase, in which Chinese partner Dongfeng and the French government will each bring 1.5 billion euros and purchase 20 to 30 % of the troubled carmaker. The sources that tipped the new strategy also said the French hope to sign the deal before 2014. However, Dongfeng’s general manager Zhu Fushou suggested he’s got other plans. 

“If we can complement each other’s advantages, if we can achieve synergies, we may go ahead to do it. Otherwise, we would not do it,” Zhu said. “As a partner, we are surely concerned about the overall business of PSA. Last year, it made a net loss of 5 billion euro ($6.90 billion).”

To illustrate the complexity of the plan, Zhu cited a recent move in which Volvo took a 45 % stake in Dongfeng’s commercial vehicle unit.

“Regarding the strategic alliance between Dongfeng and Volvo, we made preparations for several years before reaching a consensus. We both agreed that we would greatly benefit each other.”

Zhu also reinforced Dongfeng’s global ambition, saying that there was an unstoppable trend for Chinese carmakers to expand overseas.

Via Reuters