PSA, Dongfeng Said To Be Exploring A Partnership

by TTAC Staff

Published: September 18th, 2013

psa dongfeng said to be exploring a partnership

PSA, parent company of Peugeot and Citroen, is said to be exploring a partnership with China’s Dongfeng, as Peugeot looks for ways to strengthen itself amid weak sales and a perpetually sputtering European car market.

A number of solutions are being proposed, with France’s La Tribune claiming that a capital increase (with Dongfeng providing cash in exchange for equity), as well as an emerging market joint venture where Dongfeng would also be holding much of the equity, with Peugeot getting the financial resources it needs to expand in the developing world.

Complicating matters is the brand’s alliance with General Motors. GM has a 7 percent stake in PSA and is seen within the company as a key to helping PSA pull through the European crisis, where overcapacity and a need for significant economies of scale are hurting smaller players like PSA. But PSA also wants to follow the lead of rival Renault-Nissan, which has aggressively expanded in emerging markets with Dacia (a runaway success) and now Datsun. Europe is considered a mature market, and emerging markets are one of the only growth sectors left for an established auto maker like PSA (especially given that a North American expansion is off the table, even though it is also a strong market for automobiles).

Currently, the Peugeot family holds roughly 25 percent of PSA’s shares, but any deal with Dongfeng could see them lose their stake – an unthinkable occurrence in past eras.

#China #Citroen #Dongfeng #Europe #Industry #Peugeot #PSA #Sales

TTAC Staff

More by TTAC Staff

Comments

Join the conversation

17 comments

Ash78 on Sep 18, 2013

"especially given that a North American expansion is off the table" Fill a brother in here -- why is it off the table completely? Fearful that sub-VW levels of reliability just won't sell, or is it something less snide and cynical?

Like Reply
- See 2 previous
- Derek Kreindler on Sep 18, 2013
  
  I'd say that lacking the billions to launch a new brand is likely a bigger factor.
  
  Like
- Billfrombuckhead on Sep 18, 2013
  
  @Derek Kreindler I agree about how expensive it would be to launch Peugeot in America but it seems somewhat different with all these partnership deals in China. Since China seems to love VW's the 308 Golf doppleganger should do well.
  
  Like
- Corey Lewis on Oct 02, 2013
  
  No French brand has had much luck here - ever.
  
  Like
Davefromcalgary on Sep 18, 2013

Fill a brother in here - what is that excellent looking car in the article's picture? I really like it!

Like Reply
- See 6 previous
- Marcelo de Vasconcellos on Sep 18, 2013
  
  RCZ. Phenomenal car in terms of looks and engine. Suspension is ok, but really doesn't have the feel of Peugeots of old. Interior is also shared with the 308 line. In short, great looks with a ride that is somewhat lacking. More of a boulevard cruiser than the car the looks suggest.
  
  Like
- David C. Holzman on Sep 18, 2013
  
  @Marcelo de Vasconcellos It looks like a Karmann Ghia. A shame it doesn't have the feel of the Peugeots of yore. I get so nostalgic.
  
  Like
- Marcelo de Vasconcellos on Sep 18, 2013
  
  @David C. Holzman In my eyes it loks like the first Audi TT. Shame about the drive. I drove Peugeots from the 80s and early 90s. Something happened from the late 90s on. Weight?
  
  Like
- TonyJZX on Sep 19, 2013
  
  @Marcelo de Vasconcellos RCZ is a weird car. Where I am its TWICE the price of a Subaru BRZ/86 and half the seats and is marginally faster and is wrong wheel drive. Saying that I admire the thought processes that went into that car. Who wants a diesel two seat FWD quasi sports car?
  
  Like
- PriusV16 on Sep 19, 2013
  
  Wikipedia is your friend :) http://en.wikipedia.org/wiki/Peugeot_RCZ I live in Europe, and from what I´ve observed, this car is very popular with young women -- often *very pretty* young women. That´s why I always make sure to get a glimpse of the driver when an RCZ passes me. :)
  
  Like
- Sprocketboy on Sep 19, 2013
  
  @PriusV16 I have to watch more closely! There are so few of these in Germany that both times I tried to rent one at Sixt they give me a BMW 335 Coupe the first time and then a Toyota GT86 the second. On the road the RCZ looks like a more elegant TT, as another poster has noted, and there will be a 270 hp version coming out soon but still, alas, FWD.
  
  Like
- Marcelo de Vasconcellos on Sep 19, 2013
  
  @Sprocketboy In Brazil I bet these cars are even rarer than in Germany due to pricing. They look very beautiful going down the street. I have seen 2. Both cases, old dudes driving. One white haired the other bald. Not that there's anything wrong with that1
  
  Like
Big Al from Oz on Sep 19, 2013

Chinese vehicles are gaining a strong foothold in emerging economies. PSA is in deep $hit, Dongfeng already is doing business with Nissan. Nissan is doing business with Mitsubishi, who also share a platform with PSA. GM is going to sell a Nissan Platform in the US. It getting more and more complex. Also the Chinese government is treating foreign businesses poorly lately and they are at a disadvantage to the local Chinese businesses. China is a very dynamic market. Anything can and does happen. Is PSA going to bow down to whatever Dongfeng and the Chinese want, to gain a few Euro's that is desperately needs.

Like Reply
- See 1 previous
- Marcelo de Vasconcellos on Sep 19, 2013
  
  Is your last line a statement or a question, Big Al? :) I think every maker has already bowed down to the Chinese. Just the act of being able to build and sell in China is an exercise in humility. The Chinese afterall have the majority though, apparently, it's the foreign cars that sell.
  
  Like
- Big Al from Oz on Sep 19, 2013
  
  @Marcelo It's a question of how far PSA will go and give into the Chinese. I should have used a question mark, sorry. Will Dongfeng buy out PSA eventually? I would like to think that Renault/Nissan will buy out PSA.
  
  Like
Lou_BC on Sep 22, 2013

Any car company wanting to sell in China has to sell their soul to the devil. A Faustian deal since the only way they can get into the Chinese market is by "partnering" with a Chinese company. China has extremely lax copyright and patent laws so they can easily "borrow" the intellectual property of any global and build their own. The Peugeot in the picture is a good looking car, did someone say diesel powered? Intriguing. I would not want a car called a "Dongfeng". Might not go over well on a first date if your gal asks you what you are driving ;)

Like Reply
- Big Al from Oz on Sep 23, 2013
  
  @Lou I Australia there is a slang term "donger". I think a Dongfeng in Australia would be called a donger as a nickname. Maybe you can tell your "sheila" (more Oz Slang) to come and see if donger is big enough to accommodate her or does she want a bigger donger :-)
  
  Like