Approval for JV boosts PSA's presence
By Jin Jing |
July 19, 2011, Tuesday
|
Print Edition
Print Edition
PSA Peugeot Citroen's presence in the world's biggest auto market received a boost as the Chinese government has approved its joint venture with China's Changan Automobile Group.
The Changan PSA Automobile Co is jointly set up by PSA and Changan, with an registered capital of 4 billion yuan (US$615 million). The equally-owned joint venture will have an initial investment of 8.4 billion yuan.
The approval from the National Development and Reform Commission, China's top economic planning body, allows Changan to be the second joint venture partner of the French car maker in China. PSA also produces passenger cars, including Peugeot 307 and Citroen C5 sedans, in China through a tie-up with Dongfeng Motor Corp.
Analysts said PSA, the second-largest car maker in the Europe, will now be able to accelerate its expansion in China as it eyes markets outside Europe to contribute 50 percent to its global sales by 2015. PSA said its sales in China rose 10.2 percent in the first half of this year. The Peugeot and Citroen brands accounted for about 3.2 percent of China's passenger car market.
Changan, the partner of Ford Motor Corp, may also benefit from PSA's premium model offerings to improve profitability.
Under the plan, the partners will invest in a new plant in Shenzhen, Guangdong Province, to produce light commercial vehicles and passenger cars, including Citroen DS premium sedans.
The plant will have an annual output capacity of 200,000 cars and 200,000 engines in the first phase. It will also make models under Peugeot and Changan brands later.
The Changan PSA Automobile Co is jointly set up by PSA and Changan, with an registered capital of 4 billion yuan (US$615 million). The equally-owned joint venture will have an initial investment of 8.4 billion yuan.
The approval from the National Development and Reform Commission, China's top economic planning body, allows Changan to be the second joint venture partner of the French car maker in China. PSA also produces passenger cars, including Peugeot 307 and Citroen C5 sedans, in China through a tie-up with Dongfeng Motor Corp.
Analysts said PSA, the second-largest car maker in the Europe, will now be able to accelerate its expansion in China as it eyes markets outside Europe to contribute 50 percent to its global sales by 2015. PSA said its sales in China rose 10.2 percent in the first half of this year. The Peugeot and Citroen brands accounted for about 3.2 percent of China's passenger car market.
Changan, the partner of Ford Motor Corp, may also benefit from PSA's premium model offerings to improve profitability.
Under the plan, the partners will invest in a new plant in Shenzhen, Guangdong Province, to produce light commercial vehicles and passenger cars, including Citroen DS premium sedans.
The plant will have an annual output capacity of 200,000 cars and 200,000 engines in the first phase. It will also make models under Peugeot and Changan brands later.
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