Dongfeng Joins PSA Exploration Path Globalization Operation
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After Dongfeng Motor Group Co., Ltd. (hereinafter referred to as "Dongfeng Motor") and French Peugeot Citroen Group (hereinafter referred to as "PSA") signed the "General Agreement on Capital Increase and Shares" in France, the two sides signed the "Global" in Beijing recently. Strategic Alliance Cooperation Agreement. Dongfeng Motor and PSA will deepen the comprehensive cooperation in the industrial and commercial fields. The most important point is that the two sides will jointly develop the market in the Asia-Pacific region.
According to the "General Agreement on Capital Increase and Shares" signed by both parties, Dongfeng Motor will inject 800 million Euros into PSA through a private placement and share placement subscription, holding 14% of the shares, and becoming the largest shareholder of PSA with the French government and the Peugeot family. According to the “Global Strategic Alliance Cooperation Agreementâ€, the cooperation between the two parties mainly includes three aspects: The two parties will accelerate the development of the joint venture company – Shenlong Automobile Company in Wuhan, China, and increase the scale of its production and sales. By 2020, it will achieve annual production and sales of 1.5 million. Aims to create a research and development center in China to provide product development and technology services specifically for high-growth markets; to create a new joint venture company responsible for the production of vehicles for Shenlong Motors and PSA in Asian markets outside of China (the Mainland) Sales, and possibly the development of other emerging markets.
Xu Ping, chairman of Dongfeng Group, said that PSA is France's largest automotive company and has unique advantages in automotive design, technology research and development and other fields. Through deepening cooperation, the two sides will conduct synergies on a global scale and across the entire value chain, which will help bring into play the unique advantages of the two major groups and help create and create new competitive advantages in the global automotive industry.
Organizational structure adjustment is the most obvious change in this cooperation. After Dongfeng Motor becomes the largest shareholder with PSA, Xu Ping and deputy general manager Liu Weidong will enter the re-election PSA Supervisory Board as the new shareholder representative (PSA global strategic decision-making body ).
It is worth noting that Dongfeng Motor and PSA will set up an Asian Business Development Committee chaired by Liu Weidong, whose core task is the Asia-Pacific region led by China. In addition, both parties will jointly establish an export company responsible for the sales and service of Shenlong Motors and PSA products in the Asia Pacific region, and consider expanding the export company's business into markets outside the Asia-Pacific region (such as Russia and South America).
In fact, another benefit of Dongfeng Motor's shareholding in PSA is that it can integrate PSA's R&D resources across the Asia-Pacific market and allow Dongfeng Motor’s own brand Fengshen to acquire PSA technology.
According to the “Global Strategic Alliance Cooperation Agreementâ€, the two parties will expand the scope of cooperation in Shenlong Motor Corporation to promote the total sales of Peugeot, Citroen and Dongfeng brand cars of Shenlong Motor Co., Ltd. to 1.5 million units by 2020, and three brands. Each brand in the company develops and launches at least one new model each year. This is obviously very important to Dongfeng Motor. The Aeolus brand is protected by technology research and development.
After Dongfeng Motor’s shareholding in PSA, how Changan PSA, a joint venture between PSA and Changan Automobile, operates, Dongfeng Motor clearly stated that the cooperation between Dongfeng Motor and PSA is to concentrate on expanding the scope of cooperation with Shenlong Motor Co., not involving the DS brand. PSA also stated clearly that PSA will open all technologies except Dongshui to Dongfeng Motor.