PSA talks with Chang’an end without result

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PSA have been eager to get a third joint venture started in China, they currently have their JV’s Peugeot and Citroen JV’s with Dongfeng, PSA could feel that Dongfeng are overstretched with their other car producing JV’s which also include, Honda, Nissan, and Kia.

PSA found itself in a three way battle between Chang’an, Volvo, and Geely. With Geely taking over Volvo, and somehow managing to carry on the Volvo-Chang’an JV, as well as building its own Volvo cars in a new Beijing plant.

Chang’an have also found major success with their own car brand, which they are putting through a ‘brand upgrade’ in 2010, which will see them produce some mid to high level sedans for the Chinese market, as well as raising the profile of their own Chang’an brand cars across China. Chang’an might see another JV partner as just another distraction in the path to becoming a global car maker of their own.

Chang’an have invested heavily into their own brand and have further investment of 1.19 billion RMB planned for an auto test area, motorbike test area and new research centers in China. Chang’an are also investing heavily into Changhe and Hafei automobiles which they recently bought into as part of the AVIC takeover.

PSA will no doubt be forced to find another JV partner in China if further talks with Chang’an end without result again. PSA are eager to further their line up in China after a successful 2009 in China, their rival Renault, is also without a partner in China after extensive talks with Dongfeng broke down again.

The Chinese market for new joint ventures might have dried up, with the market slowly moving towards consolidation rather than expansion, those that did not yet enter might find it even harder to enter now, or even expand.