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Nissan and Dongfeng announce new JV, will build Infiniti vehicles in China

Infiniti seems determined to increase its sales in China and after announcing the long-wheelbase version of the Q50 as well as the Juke-based ESQ, the Japanese manufacturer its taking things even further. Nissan announced today that it formed a joint venture with Dongfeng Motor Corp. in China, which will produce Infiniti models exclusively for the biggest automobile market.

The president of the joint venture, which will be called Dongfeng Infiniti Motor Co, will be Infiniti China’s Managing Director Daniel Kirchert.

The company aims to sell 100,000 vehicles in China by 2018 and the joint venture start producing the Q50L in November, while a long-wheelbase version of the QX50 SUV will be produced starting 2015.

Read the entire article Nissan and Dongfeng announce new JV, will build Infiniti vehicles in China

Dongfeng chair says PSA tie-up not limited to certain regions, Brazil and Russia are considered

Xu Ping, chairman of Dongfeng Motor Group, remarked that the carmaker’s cooperation with PSA/Peugeot-Citroen is not restricted to certain geographical regions, with Brazil and Russia being considered. He remarked that Asia-Pacific region was just a starting point for the carmakers, which recently inked an alliance provided funds to the cash-strapped French carmaker.

Incoming PSA chief executive Carlos Tavares has singled Russia and South America as regions where it must improve its financial performance. PSA and Dongfeng -- which operates a joint venture in China – intend to develop new cars with an aim to capture a larger share of Chinese vehicle market. The carmakers also targets to triple overall sales in China to 1.5 million vehicles by 2020.

PSA and Dongfeng also seek to export more vehicles to other markets in Asia, particularly in southeast Asia. Chinese carmakers have been ramping expanding overseas by building plants and taking stakes in struggling foreign carmakers.

Read the entire article Dongfeng chair says PSA tie-up not limited to certain regions, Brazil and Russia are considered

PSA/Peugeot-Citroen signs tie-up with Dongfeng Motor Group

A framework agreement for Dongfeng Motor Group and the French government to inject fresh capital into PSA/Peugeot-Citroen has been signed. The signing of the agreement -- which would result to Dongfeng and France taking matching 14-percent stakes in PSA -- was graced by French President Francois Hollande and visiting Chinese President Xi Jinping.

President Hollande remarked that agreement turns PSA into a carmaker of global dimensions with presence on all markets. He remarked that the partnership is no longer just about selling, but about investing together. The tie-up allows PSA and Dongfeng to further expand their existing Chinese joint venture to co-develop vehicles, hike production as they try to capture a larger share of Chinese vehicle market and sell their offering in Asia.

Incoming PSA chief executive Carlos Tavares is now tasked to turnaround the carmaker’s lossmaking operations in Europe; stop its financial bleeding in Latin American; deliver on its plans in China; and handle its slumping operations in Russia. The agreement had pitted chairman Thierry Peugeot against his cousin Robert over the dilution of the family's stake and loss of control.

Read the entire article PSA/Peugeot-Citroen signs tie-up with Dongfeng Motor Group

Dongfeng CEO dismisses possible control of PSA

Dongfeng Motor has no intentions to take control of PSA/Peugeot-Citroen, chief executive Zhu Fushou has said as he tries to dismiss a controversy over a planned purchase of a 14 percent stake in the French carmaker. In an interview with L'Alsace newspaper, Fushou said that Dongfeng's investment in PSA is a long-term strategy that will help the French carmaker increase sales outside Europe while allowing the Chinese group to compete better with local rivals in China.

Fushou noted that the agreement is a “win-win cooperation,” adding that it is not a purchase deal but a way to help PSA return to growth. PSA unveiled in February a EUR3 billion ($4.1 billion) capital hike in which Dongfeng and the French state will pour in EUR800 million for 14 percent of the carmaker.

The deal will have the founding Peugeot family's stake drop to 14 percent from the current 25 percent holdings and 38 percent of voting rights. According to Fushou, the stake purchase of Dongfeng and the French government will allow PSA to meet its cash requirements for the next three years while it tries to develop markets outside Europe and implement a recovery plan.

Read the entire article Dongfeng CEO dismisses possible control of PSA

Observers say PSA/Peugeot-Citroen may not stabilize even with its capital tie-up with Dongfeng Motor Group and the French government. For instance, French financial daily Les Echos called the deal "the dragon that came to the rescue of the lion.” It added the while the lion isn't dead, “it has radically changed its appearance."

Director of the GERPISA car industry research network, Bernard Jullien, told Les  Echos that the PSA-Dongfeng alliance will be a partnership without precedent,  warning that the PSA-Dongfeng-France triumvirate could result to instability.

PSA recently announced a EUR3 billion ($4.1 billion) capital hike in which Dongfeng and the French government will each inject EUR800 million for 14 percent of the carmaker, with the founding Peugeot family seeing its stake drop to 14 percent from the current 25 percent stake and 38 percent of voting rights.

Read the entire article Doubts arise on whether PSA-Dongfeng-France tie-up may bring stability

PSA/Peugeot-Citroen has reached an outline agreement with Dongfeng and the French government to raise up to EUR4 billion ($5.5 billion) in capital and deepen its relationship with the Chinese carmaker, sources privy with the matter told Reuters. The agreement will be presented to the PSA board on February 18 and will probably be signed as a non-binding memorandum of understanding the same day, according to three people having direct knowledge of the matter.

The accompanying industrial plan would entail PSA and Dongfeng retaining and expanding their existing joint venture in China while increasing their r&d cooperation with a view to penetrating southeast Asian markets, according to the sources.

PSA has been holding discussions with Dongfeng for months over a plan that would entail the Chinese carmaker and France taking equal stakes of about 14 percent each. Details of the deal include a heavily discounted EUR7.50 issue price for the two new shareholders.

Read the entire article PSA reaches outline deal with Dongfeng and France over capital hike

Dongfeng Motor Group stopped trading of its shares on Feb. 10, 2014, in Hong Kong pending a disclosure relating to "inside information. The halt comes after Bloomberg’s French sources said on Friday that PSA/Peugeot Citroen negotiators and French government officials are in China for what they hope will be a final round of discussions over an agreement with the Chinese carmaker.

Dongfeng has disclosed that the discussions included investing in PSA's securities and possibly collaborating in technology, research, manufacturing and distribution. In a statement, Dongfeng said that it has not entered into any agreement and will make a further announcement when necessary. Reports have said that the agreement under discussion would entail Dongfeng and the French government taking stakes in PSA via a EUR3 billion ($4.1 billion) share issue.

The agreement could increase the number of board members at PSA from current 15 members to 22, according to a source close to the discussions: three for each major shareholder, three for the staff and 10 independents including a new chairman. The tie-ups’ industrial details still remain undisclosed. PSA has remarked it is mulling a fourth Chinese site with Dongfeng as well as an exclusive deal to develop HybridAir transmission technology.

Read the entire article Dongfeng stops share trading in HK pending insider info disclosure

Renault will build its sports utility vehicles at the site of its joint venture with Dongfeng Motor Group with an eye to sell locally made vehicles in China by 2016. Renault and Dongfeng have already inked the CHY7.76 billion ($1.28 billion) partnership agreement in Wuhan, China. Renault and Dongfeng will also cooperate with Nissan as part of a "golden triangle" to gain synergies in costs and technology.

Renault and Nissan are in an alliance while the Japanese carmaker has a production deal with Dongfeng. The joint venture site can initially produce 150,000 vehicles annually, which could be doubled in the near future, Renault said in a statement.

However, by the time Renault sells its China-made vehicles in the first half of 2016, it would have been already so behind Volkswagen, General Motors and Toyota.

Read the entire article Renault will build an SUV in China, inks joint venture agreement with Dongfeng

PSA/Peugeot-Citroen is considering new commercial and industrial projects with partners like Dongfeng Motor Group, as supported by a capital increase. In a statement, PSA said that the discussions are still at a preliminary stage and "no assurances can be given as to their conclusion." It said that there is no agreement on the terms of a potential operation.

A source privy with the matter told Reuters that PSA's board has approved a draft alliance plan this week wherein Dongfeng and the French state would acquire large minority stakes at a 40-percent discount to PSA's current share price. The board also agreed to enter final negotiations on a EUR3.5 billion ($4.8 billion) share issue that would lead to France and Dongfeng taking 20 percent stakes, the source said.

The capital hike would be priced at below EUR7 per share, and at a low of EUR6.85 in indicative offer from Dongfeng. Financial Times recently reported, citing anonymous sources, that PSA and Dongfeng are planning joint production of small cars for Southeast Asian markets, underpinned by a transfer of still specified technologies.

Read the entire article PSA confirms negotiations with Dongfeng over capital hike