For Dongfeng, an equity investment in PSA Peugeot Citroën offers the chance to compete on the global stage, something China’s state-owned car groups have struggled to do. Analysts say it is telling that the country’s two best regarded domestic manufacturers, Geely and Great Wall, are privately held and did not form Chinese joint ventures with foreign partners, writes Tom Mitchell in Beijing.
“It would be more than just an equity investment for Dongfeng,” says a person involved in the two companies’ talks. “They would demand a board seat and see it as an overall partnership that could be quite interesting because they would be getting access to very advanced technology . . . It really only makes sense if this allows Dongfeng to play in the global league.”
Sales at Peugeot’s China joint venture with Dongfeng rose 33 per cent in the first six months to 312,000, according to LMC Automotive, a Shanghai consultancy. But it still ranked only ninth in the Chinese??? market, trailing Dongfeng’s joint ventures with Nissan and Kia. First-half sales at the Chinese company’s worst-performing joint venture, with Honda, fell 7 per cent to 170,000.