Investment From China May Be Near for Peugeot
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Version 0 of 1. GENEVA — PSA Peugeot Citroën, the ailing French automaker, moved closer to grabbing a financial lifeline on Thursday, saying that it was in negotiations with Dongfeng Motor, a state-owned Chinese company with which it already has a joint venture, that could lead to “a potential capital increase.” At the same time, General Motors said it had sold its 7 percent stake in Peugeot to unidentified institutional investors for undisclosed sums, a move that could open the door for Dongfeng to acquire a piece of the French company. With recent rumors that Peugeot and Dongfeng might be talking, G.M.’s stake had been considered a complication. Peugeot, the second-largest European automaker, after Volkswagen, would say only that it was “reviewing potential industrial and commercial development projects with various partners, including Dongfeng.” The company alluded to the capital increase as one of the possibilities. News reports from Reuters and other outlets have said that Peugeot, which is burning cash during continued weakness in its main European markets, is near an agreement to sell 20 percent stakes on sharply discounted terms to both Dongfeng and the French government. Antonia Krpina, a spokeswoman for Peugeot, dismissed the reports as “rumors.” Peugeot also said that it would write down 1.1 billion euros, or $1.5 billion, in assets. The company attributed the decision to “worsening automobile markets and unfavorable exchange rates in Russia and Latin America.” The combination of announcements hit the stock hard. Peugeot’s shares fell almost 8 percent in Paris, trading to €10.63. Arnaud Montebourg, the French industry minister, was quoted Thursday by the newsmagazine Le Point as saying that Peugeot “is building global alliances for the long term that will allow it to bounce back and acquire the critical size to be a global manufacturer of the first rank.” But Mr. Montebourg insisted that Peugeot “will remain French.” G.M. took pains on Thursday to say that despite selling its Peugeot stake, the companies would continue to work together. “The alliance remains strong, with our focus on joint vehicle programs, cross manufacturing, purchasing and logistics,” Stephen J. Girsky, G.M.’s vice chairman, said in a statement. Ms. Krpina said the stake sale would not affect the planned joint production of a small minivan at G.M.’s plant in Zaragoza, Spain. “That’s still on track,” she said. The companies also said on Thursday that they would jointly build crossover utility vehicles at Peugeot’s plant in Sochaux, France. Analysts had questioned whether G.M., which has its own extensive operations in China, would want to complicate its existing relationships by letting Peugeot expand its arrangement with Dongfeng, or whether G.M. would instead be willing to spend more money on the Peugeot alliance, which so far has not lived up to expectations. Dongfeng, based in Wuhan, is one of China’s largest automakers. It and Peugeot have been assembling vehicles together since 1992, including the Fukang taxi that is based on the Citroën ZX, once a familiar sight on the streets of Beijing and other big cities. Peugeot has been hit hard by the downturn in the European car market, which has slumped since the financial crisis and was expected to shrink an additional 4 percent this year. Its sales fell 3.7 percent in the third quarter from a year earlier, to €12.1 billion. The company fared poorly everywhere but China, where its sales rose 28 percent in the first nine months of the year. Peugeot recently hired Carlos Tavares, a former Renault official, to replace Philippe Varin as chief executive. In October, Peugeot closed its factory in Aulnay-sous-Bois, near Paris, and has said it will trim its work force by more than 11,000 jobs over the next few years. The company, which also includes the auto parts maker Faurecia and a finance unit, employs more than 200,000 people worldwide, including about 90,000 in France. |