By on September 18, 2013

Peugeot_RCZ_a_St_Trond

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.

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17 Comments on “PSA, Dongfeng Said To Be Exploring A Partnership...”


  • avatar
    ash78

    “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?

  • avatar
    davefromcalgary

    Fill a brother in here – what is that excellent looking car in the article’s picture?

    I really like it!

    • 0 avatar

      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.

    • 0 avatar
      PriusV16

      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. :)

      • 0 avatar

        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.

  • avatar
    Big Al from Oz

    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.

    • 0 avatar

      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.

      • 0 avatar
        Big Al from Oz

        @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.

  • avatar
    Lou_BC

    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 ;)

    • 0 avatar
      Big Al from Oz

      @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 :-)


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