Struggling French automaker Peugeot is receiving a helping hand from halfway around the world with Chinese investor Dongfeng investing 800 million Euros, or $1.1 billion, in the European firm.
It’s a critical step for PSA Peugeot Citroen, which has been facing increasing problems – and mounting losses – in the face of Europe’s worst economic crisis in decades. There have been concerns Peugeot might not be able to survive without outside help, a situation that has led the heirs to the Peugeot family to sharply reduce their stake in the maker in return for Dongfeng’s help.
In turn, Dongfeng gets to bolster its position in its home market – now the largest automotive market in the world – gain access to much-needed technology, and potentially put it in a position where it could expand beyond China’s borders. A number of Chinese makers have been hoping to expand into Europe and North America but so far have faced numerous obstacles along the way. (more…)