Quit while behind

5 Nov 2019 By Pete Sweeney Follow @petesweeneypro

Dongfeng has made some $2 bln from its 2014 rescue of Peugeot, which aims to merge with Fiat Chrysler. The state-owned car giant can cash out and euthanise its stalled JV with Peugeot too. Both moves would be financially wise, if strategically embarrassing, for China and France.

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China’s car wreckage cries out for consolidation

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Fiat Chrysler and Peugeot owner PSA Group said on Oct. 31 they aimed to reach a binding deal to create a $50 billion group with listings in Paris, Milan and New York, and with PSA's Carlos Tavares as chief executive and FCA's John Elkann as chairman. Dongfeng Motor holds a 12.2% equity stake in Peugeot subject to a standstill agreement, the companies said.

In a television interview on Nov. 1, White House economic adviser Larry Kudlow said "we obviously are alert and on guard" regarding Dongfeng’s position in the transaction.

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