On February 18th, Dongfeng Motor Group took a stake in Peugeot Citroen and eventually became one of the largest shareholders in the same proportion with the French government and the Peugeot family. Dongfeng Motor Group's stake in Peugeot Citroen is of great significance to Dongfeng Motor, but it is not necessarily good news for another Chinese automaker with its own brand. Peugeot Citroen currently establishes Changan Peugeot Citroen with Changan Automobile (Weibo) in addition to Dongfeng Motor's joint venture company, Shenlong Motor Co., Ltd., which currently focuses on positioning high-end models. However, the joint venture between Changan Automobile and PSA Peugeot Citroen may have changed due to the Dongfeng Motor Group’s stake in Peugeot Citroen. Changan Peugeot Citroën’s position may therefore be in an all-too-ambiguous situation.
When Changan Automobile and PSA Peugeot Citroen began planning to set up a joint venture in 2009, Dongfeng Motor Group is still far from any signs of establishing a cooperative relationship with PSA Peugeot Citroën today. Perhaps PSA Peugeot Citroën at the time of the company's production and sales scale has not been significantly improved in the long-term situation, hoping to establish another joint venture company with another Chinese auto brand automotive companies in order to achieve a breakthrough in the Chinese market.
Establishing two joint ventures in China is the practice of many multinational companies. PSA Peugeot Citroen is definitely looking forward to breaking the deadlock in the Chinese auto market through a joint venture with Changan. However, the joint venture negotiation between Changan Automobile and the standard Citroen Company was for several years. It was not until the end of 2011 that the joint venture company was finally established, and the implementation of localization of the high-end brand DS products under the Citroen brand began. Obviously, Citroën, as the general market position in the eyes of consumers, suddenly needs a much bigger effort to launch a high-end brand in the Chinese market.
Especially for high-end brands, this difficulty is even greater. Because high-end brand consumers value the brand's market image and value more. Without the Dongfeng Motor Group’s stake in Peugeot Citroen today, the joint venture between Changan Automobile and PSA Peugeot Citroen may have great value and potential for continuous development.
However, after the Dongfeng Motor Group bought shares of Peugeot Citroen, the external environment of Changan Peugeot Citroen has undergone tremendous changes. Currently, according to the memorandum of understanding signed between Dongfeng Motor Group and PSA Peugeot Citroen, Dongfeng Motor Group will have considerable rights in the future PSA Peugeot Citroën's technology research and development, market decision-making, and strategy development. In particular, Dongfeng Motor Group, as the joint largest shareholder, will have two representative seats of the PSA Peugeot Citroën Supervisory Board and will also serve as Chairman of the Asia Business Development Committee under the Board of Supervisors.
The so-called Asian business certainly includes the Chinese market, and the Asian business will certainly be dominated by the Chinese market. Any development in the Chinese market will inevitably take into account the interests of Dongfeng Motor Group in the Chinese market, and need to maximize the benefits of PSA Peugeot Citroën and Dongfeng Motor Group in the Chinese market. In this sense, Dongfeng Motor Group will be more likely to focus on Dongfeng Motor Group and Dongfeng Motor Group and PSA Peugeot Citroën, the joint venture company of PSA Peugeot Citroën. To make Dongfeng Motor Group and Shenlong Company get the largest benefit from the Chinese market, the best way is to inject all the resources of Peugeot Citroen into these two companies.
Moreover, PSA Peugeot Citroën leaned toward Shenlong and Dongfeng Motor Group in the future, not only from the subjective will of Dongfeng Motor Group as a shareholder, but also in line with general commercial principles. Because, only when PSA Peugeot Citroen's additional resources are injected into a joint venture, the economies of scale can be maximized. Obviously, this is also a more favorable choice for Peugeot Citroen.
The reason why PSA Peugeot Citroen used to establish a joint venture with Changan Automobile may partly hope to counterbalance Dongfeng Motor Group's purpose with Changan Peugeot Citroen. However, today's Dongfeng Motor Group's shareholding has eliminated the purpose of such checks and balances. PSA Peugeot Citroën and Dongfeng Motor Group are no longer the two opposing rivals in the general sense of the Sino-foreign joint venture company. The interests of both parties have been fully integrated because of this shareholding.
From the Dongfeng Motor Group's point of view, Dongfeng Motor should not be willing to allow Changan Automobile to sit large. After all, Dongfeng Motor and Changan Automobile are also competitors in the Chinese market.
Since Dongfeng Motors already has more say in Peugeot Citroen, Dongfeng Motor is very likely to use its resources to more support the development of Shenlong and the Dongfeng brand, and may even restrict Changan Peugeot Citroën to some extent. The company's development. However, both Dongfeng Motor Group and PSA Peugeot Citroen, even if they want to limit the development of Changan PSA Peugeot Citroen, Changan Peugeot Citroen is a legal person after all, and PSA Peugeot Citroen has signed a long-term joint venture with Changan Automobile. contract.
Therefore, PSA Peugeot Citroën, which is one of the major shareholders of Dongfeng Motor Group, could not completely ignore Changan Peugeot Citroen, and the established product launch and market expansion must continue. However, the pace and speed of launch of the product may slow down. Even said that as long as Changan Automobile and PSA Peugeot Citroen have no DS brand exclusivity clause in the signing of the joint venture agreement, the future Shenlong Company may also introduce this high-end brand product under its own product framework. Because of this, the benefits of Dongfeng Motor Group will be maximized.
In any case, because the Dongfeng Motor Group shares in PSA Peugeot Citroen, so that the future of the joint venture company Changan Peugeot Citroen is full of variables, or will face the embarrassment of Changan Peugeot Citroen in the end will be how to break the bureau, has yet to continue the game of interests of all parties.
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