PSA may sell stake to Dongfeng, report says
PSA Peugeot Citroen, Europe's second-biggest carmaker, is considering selling a stake to Chinese automaker Dongfeng Motor Corp. to raise cash for an expansion outside its home continent, two people familiar with the matter said.
The talks are preliminary and nothing has been decided, said the people, who asked not to be identified because the talks are private.
The sale of a stake could lead the Peugeot family, which owns 25.5 percent of the French carmaker's shares, to lose control of the company, the people said. Jean-Baptiste Thomas, a Peugeot spokesman, declined to comment.
Peugeot, which reported a first-half operating loss in its automotive unit of 510 million euros (4.2 billion yuan), is losing market share in Europe to Volkswagen AG, the continent's largest automaker. Peugeot is especially reliant on debt-strapped southern countries such as Spain, Italy and France for sales.
To push expansion elsewhere, Peugeot partnered with Dongfeng to open an assembly plant in July to produce four models in China. The new factory, Peugeot's third in China, will increase the company's annual capacity in China by two-thirds to 750,000 vehicles in 2015.
The French manufacturer hired two banks to examine options to deepen ties with Dongfeng, Les Echos reported on its Web site this week. The French newspaper was first to report the talks about a possible stake sale to Dongfeng.
Peugeot, which aims to reach 5 percent market share in China by 2015, plans to begin selling the new 308 hatchback and 2008 crossover next year in the country.
CEO Philippe Varin has pledged to cut the manufacturer's cash-consumption rate 50 percent this year after burning through 3 billion euros last year. He plans to eliminate 11,200 jobs in France by 2015 and close a car plant in Aulnay, on the outskirts of Paris.
Peugeot also has a joint venture in China with Changan Automobile Group and will inaugurate a new factory in Shenzhen at the end of September. The plant will first produce the DS5 compact executive car.
First-half sales with Dongfeng rose 33 percent to nearly 277,000 vehicles, Peugeot said in July.
The sale of a stake could lead the Peugeot family, which owns 25.5 percent of the French carmaker's shares, to lose control of the company, the people said. Jean-Baptiste Thomas, a Peugeot spokesman, declined to comment.
Peugeot, which reported a first-half operating loss in its automotive unit of 510 million euros (4.2 billion yuan), is losing market share in Europe to Volkswagen AG, the continent's largest automaker. Peugeot is especially reliant on debt-strapped southern countries such as Spain, Italy and France for sales.
To push expansion elsewhere, Peugeot partnered with Dongfeng to open an assembly plant in July to produce four models in China. The new factory, Peugeot's third in China, will increase the company's annual capacity in China by two-thirds to 750,000 vehicles in 2015.
The French manufacturer hired two banks to examine options to deepen ties with Dongfeng, Les Echos reported on its Web site this week. The French newspaper was first to report the talks about a possible stake sale to Dongfeng.
Peugeot, which aims to reach 5 percent market share in China by 2015, plans to begin selling the new 308 hatchback and 2008 crossover next year in the country.
CEO Philippe Varin has pledged to cut the manufacturer's cash-consumption rate 50 percent this year after burning through 3 billion euros last year. He plans to eliminate 11,200 jobs in France by 2015 and close a car plant in Aulnay, on the outskirts of Paris.
Peugeot also has a joint venture in China with Changan Automobile Group and will inaugurate a new factory in Shenzhen at the end of September. The plant will first produce the DS5 compact executive car.
First-half sales with Dongfeng rose 33 percent to nearly 277,000 vehicles, Peugeot said in July.
