Following its capital tie-up with China's Dongfeng Motor Group, PSA Peugeot Citroen has announced that it will create a new joint research and development centre in China to develop new products for emerging markets like South East Asia.
Presently, the PSA group already operates its China Tech Center (CTC) in Shanghai, the company's first R&D and design centre outside of Europe. The new joint R&D centre with Dongfeng is likely to be located in Shanghai as well and will focus on joint development of platforms, shared use and procurement of parts.
Under a new capital tie-up inked on 26-March, Dongfeng and the French government will each take a 14 percent stake in PSA Peugeot Citroen. The Peugeot family will also reduce their stake from 25 percent to 14 percent. The capital tie-up aims to boost the fortunes of the Peugeot and Citroen brand, as well as Dongfeng's own Feng Shen brand.
A report by Japan's Nikkei adds that the tie-up will pair Peugeot's design capabilities and technologies with Dongfeng's cost-competitive procurement network. Together, the two partners intend to develop new cars targeted at consumers from Southeast Asia, China and other emerging markets.
It also adds that the first resulting product from the new partnership will be low-priced small cars, and that the company plans to release one new model every year for each of the three brands: Peugeot, Citroen and Feng Shen.
At the moment, both PSA Peugeot Citroen has only one model aimed at emerging markets - the 301 sedan and its sister car the Citroen C-Elysee.
PSA Peugeot Citroen has also announced that it will setup a new joint venture company to promote exports of Peugeot, Citroen and Feng Shen branded vehicles in Southeast Asia and possibly in other emerging markets.
The company aims to sell 1.5 million cars globally in 2020.
The direct involvement of Dongfeng, which started as a local partner for PSA Peugeot Citroen in China in 1992, into the affairs of its former brand principal is certainly raising many eyebrows within the industry.
As if the relationship is not complicated enough, Dongfeng is also a local partner for Nissan, Honda and Kia in China.

Source : livelifedrive