SHANGHAI Feb 20 Dongfeng Motor Corp, whose
listed unit has agreed to buy a 14 percent stake in PSA Peugeot
Citroen, said on Thursday it would invest 2 billion
yuan ($329.14 million) to expand its technology centre to boost
Dongfeng Motor Group Co Ltd announced on Tuesday
that it and the French government would inject 800 million euros
($1.10 billion) each into the troubled French carmaker as part
of a 3 billion euro plan to rescue the loss-making
As part of the non-binding agreement, Dongfeng and PSA said
they would increase cooperation in areas including research and
distribution in other Asian markets, underlining the global
ambition of China's second biggest carmaker.
Expansion of the technology centre in Wuhan in central
China, to be completed in 2016, would lay a foundation for the
development of advanced engines and green vehicles, Dongfeng
Motor Corp said in a statement.
Dongfeng currently has one indigenous passenger brand,
PSA and Dongfeng have agreed to jointly establish a R&D
centre and are consider setting up a sales company to develop
and sell cars in Asia. PSA already has a China joint venture
A Dongfeng source who was briefed on the company's strategy
by the top management said the promotion of its brand globally
was an important factor behind the deal with PSA.
Dongfeng Peugeot Citroen Automobile Co, the joint venture,
aims to triple annual sales to 1.5 million vehicles in 2020. One
third of that target would be from Dongfeng's own brand, said
the source who declined to be identified because he was not
allowed to speak to the media.
Dongfeng has formed joint ventures in China with PSA, Honda
Motor Co Ltd, Nissan Motor Co Ltd, Renault SA
and Hyundai Motor Co - the most among any
Chinese carmaker - but sales of its own brand, Fengshen, make up
only a fraction of its total sales.
($1 = 6.0764 Chinese yuan)
($1 = 0.7271 euros)
(Reporting by Samuel Shen and Kazunori in Shanghai; Editing by