PSA says still in talks with AVIC for Hafei tie-up

Shanghai, February 25 (Gasgoo.com) PSA Peugeot-Citroen's CEO, Christian Streiff, said yesterday in Beijing that his company is still in talks with Chinese carmaker Hafei Auto's parent AVIC (China Aviation Industry Corp) for another PSA auto venture in the country, reported 21st Century Business Herald today.

During his stay in Beijing before flying to Wuhan city, headquarters of Dongfeng Peugeot-Citroen Automobile Co., for this year's management meeting, Streiff told the newspaper that China remains to be the strategic center of PSA Peugeot-Citroen's global development, his company will keep the harmonious cooperation with Dongfeng Motor Group and will support their joint venture for its sustained growth.

When asked whether to resume the halted talks for tie-up with Hafei Auto, the PSA boss replied: "We're still working with AVIC's friends on possible cooperation [with its subsidiary Hafei Auto]. This project should be a supplement, not a rival, to the Dongfeng Peugeot-Citroen venture." The French carmaker has been trying to establish another joint venture in China for the local market.

"In Recent months, the auto industry's environments in China and other parts of the world have changed tremendously and we will adjust our projects to the changes," Streiff said, adding that his company will continue to cut costs under CAP 2010, PSA's ongoing reconstruction plan, with the cost-cuts goal likely to be reached this year.

In May 2008, it was reported that PSA and Hafei would build with PSA's current Chinese partner Dongfeng a three-party venture in southern Chinese city of Shenzhen for making small cars such Peugeot 107 and Citroen CI. In June 2007, PSA and Hafei signed a memo of understanding to start a feasibility study of a 50-50 joint venture.