Dongfeng Invests into 800 Million Euros into PSA, Will Found New Joint Venture in China

Chinese automobile brands have accelerated overseas market development. Dongfeng Group has invested 800 million euros into PSA. Both of them shall sign global strategy alliance contract at Beijing.

According to the contract, Dongfeng Group shall invest 800 million euros into PSA by targeted placement and allotted stocks. The group will hold about 14% shares of PSA and bring Dongfeng as one of the largest holders with France government and Peugeotfamily. The cooperation includes 3 directions: found a joint venture in Wuhan of China- DPAC development, which shall realize 1.5 million sales up t0 year 2020. Besides, found a research center together in China. And found a new joint venture.

As early as the next half year of last year, LIU Weidong, negotiation leader of Dongfeng has leaded cooperation solution after Dongfeng investment. According to the plan, Dongfeng will merge PSA Asia-Pacific research center located in Shanghai. Besides, Dongfeng shall found a new value chain research system with PSA.

On manufacture aspect, Dongfeng，Peugeot and Citroen will outsource to DPAC. Finally, annualproduction of the 3 brands shall reach 500 thousands. Each brand will introduce at least 1 new car into market. Meanwhile, Dongfeng will share the oversea plant of PSA as well. ZHU Fushou takes the cooperation with PSA as “globally value chain cooperation”, which includes research, manufacture, purchase and the entire chain cooperation.

According to the contract, both sides shall found a new joint venture together, which in charge of DPAC and PSA sales overseas out of China (mainland). It is also possible for other emerging market development.

About sales channel aspect, it will found sales company for Asia-Pacific area for DPAC, Dongfeng and PSA product sales, particularly into ASEAN. DPAC has exclusive authorize for all product sales of Peugeot and Citroen. PSA new product introduced into Chinese market shall be included into DPAC sales channel.

With the contact signed up, board of visitors of PSA top level is adjusted step by step. According to plan, XU Ping, president of Dongfeng Group will take vice president of board of visitors of PSA. LIU Weidong, vice general manager of Dongfeng Group will take president of Asian business commission.