Dongfeng Motor: It is too early to invest in Peugeot Citroen


Dongfeng Motor’s call for shares in the Peugeot Citroen has been very high, but after the Chinese Dongfeng Motor Company recently approached the investment bank, it is still too early to decide whether to invest in the Peugeot Citroen.

PSA Peugeot Citroen is considering selling its shares to Dongfeng, its joint venture partner, to raise funds to expand its market outside of Europe, but informed sources earlier this month disclosed that negotiations between the parties on this matter are still in the early stages. He also said that PSA Peugeot Citroen currently owns 25.5% of its joint venture company, and the sale of shares may cause Peugeot Citroen to lose control of its joint venture company.

By the end of this year, PSA Peugeot Citroen will have four factories in China, and the first three factories with Dongfeng Motor Group are located in Wuhan. In July this year, the third auto assembly plant that the two parties cooperated in was inaugurated in Wuhan, which will increase the annual production capacity of Peugeot Citroen in China by two-thirds and will reach 750,000 by the end of 2015. On the 28th, the joint venture company of PSA Peugeot Citroen and Changan Automobile Group has decided to open its fourth factory in Shenzhen. The plant will produce its high-end model DS series, which will produce the DS5.

"The investment bank has discussed with us about investing in Peugeot-Citroën. We are doing preliminary research on this," said Dongfeng Group executive Song Hefeng. "But at the moment we haven't reached any conclusion. It's still a long time. We need to think about it. "It is expected that PSA Peugeot Citroen will lose 1.5 billion euros (equivalent to 12 billion yuan) in the European market this year. Dongfeng Motor will certainly consider such factors before deciding whether to continue investing in Peugeot Citroen.

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