PSA and Dongfeng may cooperate in Russia, Brazil

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BEIJING (Reuters) -- The chairman of China's Dongfeng Motor Group said cooperation with PSA/Peugeot Citroen is not limited to certain geographical regions, and that Brazil and Russia are possible future areas.

Xu Ping told a media briefing in Beijing today that the Asia-Pacific region was just a "starting point" for the two companies, which earlier this week officially signed an alliance that would give much-needed cash to the troubled French automaker.

New PSA CEO Carlos Tavares has identified Russia and South America as regions where the automaker must improve its financial performance.

PSA and Dongfeng have a long-established joint venture in China. They plan to develop new cars in an effort to grab a bigger share of China's huge auto market, which is projected to grow further through 2020. They aim to triple total sales to 1.5 million vehicles in China by the end of the decade.

They also hope to export more cars to other markets in Asia, especially those in the populous southeast Asia region.

Chinese carmakers, including Dongfeng, have been ramping up overseas expansion by building manufacturing plants overseas and taking stakes in struggling foreign carmakers.

On Wednesday in Paris, during Chinese president Xi Jinping's European tour, top officials from Dongfeng and PSA sealed a framework deal for state-owned Dongfeng and the French government to take matching 14 percent stakes in PSA in a three billion euro ($4.1 billion) deal.

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