The new joint venture between Dongfeng Motor and PSA Peugeot Citroen is the first tie-up between European and Chinese automakers for the purpose of cultivating sales in southeast Asia, a Japanese business daily said.
The Nikkei said the pair will cooperate in developing new cars, mainly to meet rapidly growing demand in Southeast Asia.
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Japanese automakers dominate in Southeast Asia with an 80-90% market share so the strategic partnership between Dongfeng and Peugeot is certain to ramp up competition in the region. Other leading global automakers such as General Motors have begun to establish a presence in the region.
The new global strategic partnership between Dongfeng and PSA steers their relationship past the recent capital tie-up onto the road of actual collaboration, involving joint research at a new R&D centre in Shanghai, joint development of platforms, and shared use and procurement of parts, the Nikkei said.
By melding Peugeot’s design capabilities and technologies with Dongfeng’s cost-competitive procurement network, the partners intend to develop new cars geared for Southeast Asia, China and other emerging markets. First on the road will be low-priced small cars, but the plan is to release one new model every year for each of the three brands: Peugeot, Citroen and Dongfeng.
The partners also plan to establish a new company that will be responsible for exporting and selling their cars in Southeast Asia and other emerging markets, the Nikkei said. They aim to sell 1.5m cars in 2020, or triple the current number of jointly manufactured cars.
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By GlobalDataAlthough Dongfeng already has joint production arrangements with Nissan Motor and Honda Motor, the Chinese carmaker seeks a deeper collaboration with Peugeot, in terms of both capital and operations. Chairman Xu Ping sees the partnership as a way to accelerate the company’s international push, the Nikkei said.
