Dongfeng PSA Alliance is getting better

With the newly appointed CEO of PSA Asia Operations Olivier just returning to China, he could not wait to show the outside world the roadmap for PSA's future cooperation with Dongfeng Motor.

According to the plan, PSA and Dongfeng will set up an R&D center with an equal share of equity based on the existing PSA Asia-Pacific R&D center. At the same time, the two sides will also establish a coordination office in Paris to handle daily business between the groups and seek new cooperation opportunities in the future. All kinds of signs show that with the gradual cooperation between PSA and Dongfeng, the win-win situation between the two sides may be realized in the near future.

Coordinating institutions of both parties settled in Paris
Since Dongfeng invested PSA in PSA in March of this year and became its largest shareholder, Dongfeng and PSA have always been concerned about the planning of strategic adjustment, product launch, and division of functions. On June 12th this year, Tang Weishi, the PSA chief who took office for two months, completed the restructuring of the PSA management layer and announced the list of members of the new Executive Committee as the core PSA management layer.

Among them, Olivier, former chief executive officer of PSA Asia Operations, served as chief executive of China-Southeast Asia and concurrently served as executive vice president. In the future, he will work together with Liu Weidong, deputy general manager of Dongfeng Corporation, who has obtained a seat in the PSA decision-making board of supervisors and served as chairman of the PSA Asia Business Development Committee, to jointly manage PSA and Dongfeng’s collaborative development in China and Southeast Asia, including hosting the Shenlong Motor’s China operations, future exports to Southeast Asia, and operations of new R&D centers.

“We will set up a coordination office in Paris with Dongfeng. This office will handle some daily business between the two groups in the future, including we will look for new cooperation opportunities in the future.” A few days later, Olivier returned to China. Began to share his plans with the outside world. He said that the future size of the Coordination Office will be around 10, and Dongfeng and the foreign side will each have a manager responsible for related affairs, among which Dong Wenfeng will be Wei Wenqing.

In fact, to prepare for the PSA Asia's new strategy, Dongfeng and PSA's joint venture company, Shenlong Motors, has made personnel adjustments. The company’s former deputy general manager Wei Wenqing was transferred to the Deputy Director of Dongfeng Motor’s Strategic Planning Department. Lv Haitao, the manager, was transferred to the deputy general manager of business of Shenlong.

In the eyes of industry analysts, the establishment of a special coordination office is to establish a communication mechanism for deeper cooperation between the two parties and will also pave the way for future cooperation and development. Regarding the doubts about why the Asian market is focused on the organization of the Asian market but located in France, Zhang Yuguang, director of public relations and communications for PSA Asia, stated that “the office of the coordination office is serving the PSA's supervisory board and not serving consumers. We need The news can be delivered to the board of supervisors in a timely manner."

DS will live on their own R & D <br> <br> is not only a coordinating body between the two sides surfaced, by the fact that Europe's second largest carmaker and China's second largest auto group consisting of giant aircraft carrier has been launched in China and Southeast Asia The market has caused waves.

It is reported that Dongfeng and PSA will establish a new R&D center in Shanghai based on the existing R&D center of PSA Asia Pacific. Olivier emphasized that Dongfeng and PSA have equal rights in the future R&D centers. On the premise of guaranteeing the equivalence of shares, the cooperation between the two parties is not the only one. For example, he said that the R&D center can be established with a 50 percent stake in each of Dongfeng and PSA, and it can also be established with 40% each of Dongfeng and PSA and 20% of Shenlong.

It is worth noting that Dongfeng and PSA's R&D system will integrate Dongfeng Automotive Technology Center, Shenlong Automotive Technology Center and PSA Asia Pacific R&D Center in Shanghai. Therefore, the research and development of the Dongfeng Fengshen brand also need to rely on this system. In this regard, Olivier revealed that in the future, the new joint research and development center will not only discuss and confirm the product planning of the Peugeot and Citroen brands, but will also conduct special product planning and design for Dongfeng Fengshen.

In addition, Olivier also clearly stated that it is currently considering whether or not DS related research and development in the PSA Asia-Pacific R&D center will be affected by business adjustments. According to him, some of DS's ongoing projects will continue to be conducted by R&D centers, and even after the completion of the new R&D center, it will also take over some of the DS's business. "But this is only a short-term plan," Oliver stressed. In the long-term planning, it may be possible to increase investment in the future and set up an R&D center for DS brand in Shenzhen.

Dragon expansion or July clappers <br> <br> In fact, the establishment of joint R & D center, only a part of the stake in Dongfeng Motor PSA contracts. In accordance with its cooperation, it also includes accelerating the production and sales scale of Shenlong Motors, achieving the goal of producing and selling 1.5 million vehicles per year by 2020, and establishing sales of new joint venture companies responsible for production of Shenlong and PSA vehicles in Asian markets outside China.

According to the data, Shenlong’s 2014 sales target is to fully impact 650,000 vehicles and challenge 700,000 vehicles. From January to May this year, Shenlong's total sales volume was 286,000 units, up 25% year-on-year. In the coming months, the new Peugeot 408, Citroen C5 and SUVs and other new vehicles are expected to drive further sales growth. .

With the ever-increasing sales volume, the production capacity of Shenlong's factories has become increasingly prominent. Shenlong Motors insiders said that the existing 100,000 capacity gap will be resolved through double shift production.

At the same time, following the production of 150,000 capacity of the first phase of the third plant of the Shenlong Motor Wuhan last year, the capacity of 150,000 vehicles for the second phase of the project has also been incorporated into the start-up plan. Southern Reporter learned that the plan is likely to be formally adopted on the Shenlong Automobile Board held in July. In addition, the fourth plant of Shenlong has been included in the planning schedule. Some media reports indicate that Shenlong has signed a strategic agreement with the Sichuan Provincial Government on the new factory and the future production capacity will be settled in Chengdu.

At the same time, Dongfeng and PSA's export business to the Southeast Asian market has also begun to advance. It is reported that Shenlong has already set up an export preparation group. The person in charge is Meng Sikai, deputy general manager of business of Shenlong Motor Company. In the future, he is likely to serve as general manager of the new company.

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