PSA and Hafei set up a 50% shareholding in a commercial vehicle factory

The production base is located in Shenzhen. On June 29th, PSA and Hafei Automobile Group officially signed a memorandum of understanding to explore the feasibility of establishing a joint venture company. The two parties plan to set up a new joint venture focused on producing light commercial vehicles under the PSA brand. Joint Venture for Commercial Vehicle Production According to reports, the new joint venture will be equally owned by Hafei Motors Group and PSA Peugeot Citroën Group, with both holding 50% of the shares. The company will focus on manufacturing and selling commercial vehicles with fewer than 10 seats. The establishment of the joint venture will leverage Hafei’s existing production facilities in Shenzhen, Guangdong. While the cooperation framework and objectives have been finalized, specific production timelines and models have not yet been disclosed. However, it's likely that the Peugeot 807 and Citroen Relay models will serve as the foundation for future products. A representative from Dongfeng Peugeot mentioned that the collaboration between Dongfeng Group and PSA Peugeot Citroën in the Shenlong project has been smooth and successful. Both sides have already implemented plans to expand production capacity and add more passenger car models. A second plant with an annual output of 200,000 units is expected to start operations by the end of this year. The passenger car strategy at Shenlong is well-established. Introducing lower-tier passenger cars through Hafei could lead to complex coordination challenges between the two joint ventures. PSA Accelerates Expansion in China An industry analyst noted that the formation of this joint venture signals that PSA Peugeot Citroën is accelerating its strategic moves in China. The newly appointed head of PSA’s China department, Du Sen, raised the group’s 2010 sales target in the Chinese market from 600,000 to 600,000 units. However, given the current capacity planning at Shenlong, achieving this goal would be difficult without additional partnerships. Collaborating with Hafei appears essential. Entering the commercial vehicle sector marks a significant shift in PSA’s strategy within the Chinese market. In fact, discussions between Peugeot Citroën and Hafei began three years ago. At the start of this month, Du Sen revealed that negotiations with Hafei Motors are progressing rapidly. However, the partnership is not focused on low-cost passenger cars, as many had speculated, but rather on large light commercial vehicles. Related topics: Dongfeng Group announced it will hold "Hafei"

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