Peugeot looks to Dongfeng deal in wake of 2013 loss
French carmaker Peugeot Citroen has secured a deal with China's Dongfeng Motors and the French government that will see both invest €800m (£660m) in the company for a stake of 14 per cent. The company expects another €1.4bn to be raised from existing investors in Peugeot.
Peugeot said the deal would "strengthen overseas cooperation to achieve the objective of selling 1.5m vehicles under the Dongfeng, Peugeot SA and Citroen brands per year starting from 2020".
Should shareholders approve the venture, the Peugeot family's 25.4 per cent stake will be reduced to 14 per cent.
The announcement came as Europe's second-largest carmaker reported a loss in profit before tax of €2bn for 2013 – narrowing from the €5bn loss seen in 2012. Sales were down by 2.4 per from the previous year to €54bn – due to weak demand in Europe.
Philippe Varin, chairman of the PSA Peugeot Citroen Managing Board, commented:
We have gone through some very challenging years for the European automotive industry, which have added to the Group’s structural difficulties, notably its over-dependence on Europe. We vigorously implemented difficult restructuring measures which are now starting to bear fruit.