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Besides the U.S., China is now including a soft car market. No wonder the French car manufacturer, PSA Peugeot-Citroen, expanded cooperation in the Bamboo Curtain country. They plan to hold a new partner, Chongqing Changan Automobile Co..
From the rumors that developed, the agreement of both parties was discussed and closer to partnership. However, an executive of Changan dismissed news that cooperation will be signed before the Lunar New Year Day which fell on February 14, 2010, as quoted Chinacartimes.com (4/2/2010).
Not yet known what kind of business deal the two sides to this story was published. Previously, Peugeot-Citroen has been holding a local automobile manufacturer Dongfeng Motor Corp. since 1990.
Peugeot-Citroen said to start looking for a second local partners since 2004 to enhance competitiveness in the market Panda Affairs, including competing with other world automotive manufacturers, like General Motors and Volkswagen, which dominates the domestic market.
In June 2007, PSA and small automotive manufacturers in China, Hafei Auto, has signed an agreement with the MOU to launch the feasibility study to produce cars together. Well, turns out Hafei Auto Changan has merged with last year.
"PSA experiencing slow progress in China due to limited production capacity and cooperation are not smooth. Building a new partnership with a stronger partner is needed," said Li Chunbo, an analyst at Citic Securities Co..
Over the past year, sales jumped 52 percent PSA touched 272,000 units as well as making China the second largest market in the world. Meanwhile, other rivals as GM sold 1.83 million units, and VW 1.4 million units.
Changan Auto Group sold a total of 1.86 million units last year, including 820,000 of his own product and another 500,000 units which is a joint product. This year, manufacturers will sell as many as targeting 2.2 million units in China.
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