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

The production base is located in Shenzhen. On June 29, 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 create a new joint venture focused on producing light commercial vehicles under the PSA brand. Joint Venture for Commercial Vehicles According to reports, the new joint venture will be equally owned by Hafei Motors Group and PSA Peugeot Citroen Group, with each holding 50% of the shares. The company will produce and sell commercial vehicles with fewer than 10 seats. The establishment of this joint venture will leverage Hafei's existing production facilities in Shenzhen, Guangdong Province. While the cooperation model and objectives have been finalized, specific production timelines and vehicle models are still pending announcement. However, it is likely that the Peugeot 807 and Citroen Relay models will serve as the basis for future products. A representative from Dongfeng Peugeot mentioned that the collaboration between Dongfeng Group and PSA Peugeot Citroen Group under the Shenlong project has been smooth and successful. Both parties have already implemented plans to expand the production capacity of the Shenlong project and increase the number of passenger car models. A second plant with an annual capacity of 200,000 units is expected to start operations by the end of this year. PSA’s passenger car strategy at Shenlong is well-established. If lower-tier passenger cars are introduced through Hafei, it could lead to complex coordination challenges between the two joint ventures. PSA Accelerates Strategy in China An auto analyst noted that the formation of this joint venture signals PSA Peugeot Citroen’s accelerated strategy in the Chinese market. The newly appointed president of PSA’s China department, Du Sen, raised the group’s 2010 sales target in China from 600,000 to 700,000 units. However, given Shenlong’s current capacity, achieving this goal would require additional partnerships. Collaborating with Hafei appears essential. Entering the commercial vehicle sector marks a significant shift in PSA’s strategy within China. In fact, negotiations between Peugeot Citroen and Hafei began three years ago. At the beginning of this month, Du Sen revealed that “Peugeot Citroen is in advanced talks with Hafei Motors. The cooperation is progressing quickly.” However, the partnership is not focused on economy passenger cars, as many had speculated, but rather on large light commercial vehicles. Related Topics: Dongfeng Group Announces "Hafei" Partnership

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