Changan PSA expected to begin reporting net profits by 2015

Gasgoo.com (Shanghai December 17) - The new Changan PSA joint venture is expected to earn a profit by 2015, the Nanfang Daily reported, citing statements made by an official from the manufacturer. The news comes not long after Changan Automobile Group transferred its partial stake in the new JV to subsidiary company Chongqing Changan Automobile.

Late last month, Changan Group decided to sell its 50 percent stake, in the Changan PSA JV for two billion yuan ($318.68m) to subsidiary Changan Automobile. Changan PSA is the most expensive Sino-foreign JV in recent history, with its total investment valued at 8.4 billion yuan ($1.34b). According to Changan, the JV has plans to bring over a variety of high-class cars to China, which is now the world's second largest market for luxury vehicles after the United States. The JV's new production site in Shenzhen, Guangdong is scheduled to begin operation next year, when it will begin domestically manufacturing Citroën DS models.

According to the internal source, Changan PSA will run net deficits of approximately 520 million yuan ($82.81m), one billion yuan ($159.25) and 279 million yuan ($44.43m) in 2012, 2013 and 2014, respectively. The large deficit in 2013 is attributed to fees related to the recent stock transfer that will be accounted for next year. Then, in 2015, it should start turning up profits.