Hafei-PSA to set up Joint Venture?

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Hafei and the French automaker PSA have long been rumored to be putting together a joint venture in China that would probably see Hafei and PSA building Citroen MPV’s in the Chinese marketplace, but talks seem to have been on going since mid 2007 with not much in the way of action since then,

The potential for a Hafei-PSA JV shows that Hafei arent quite ‘over‘ as previously thought.

According to recent reports, PSA and Hafei have resumed their talks on creating the JV which seemed to have stalled sometime ago due to opposition from PSA’s original JV partner, Dongfeng. Dongfeng have since been named in a plan to take over Hafei, but nothing has come of that either. A memorandum of understanding was signed between PSA and Hafei to research the possibilities of building MPV’s at Hafei’s Shenzhen factory in southern China. PSA plans to improve its Chinese market share and take on VW, and Toyota in the Chinese market and sees the best way of doing that is by offering more models in China.

PSA is currently underperfoming in the Chinese market, with sales being down at Peugeot by 3.7% despite the automotive market growing by a staggering 9%.