(Reuters) -Hong Kong’s Dongfeng Motor Group and the Netherlands-based Stellantis said on Thursday the automakers will expand their vehicle and component export business through an asset sale to better capture the burgeoning China auto market.
Under the asset transfer deal, Dongfeng will acquire land use-rights and buildings in Wuhan and Xiangyang from Dongfeng Peugeot Citroën Automobile (DPCA), its joint venture with Stellantis, for 1.71 billion yuan ($233.69 million).
China’s auto market, the world’s largest, is on track to reach nearly 25 million vehicles in sales this year with overall growth of about 3%, and the share of EVs and plug-ins is rising fast.
Last month, Honda Motor Co said its Chinese unit will establish a joint venture with Dongfeng and Guangzhou Automobile Group to procure batteries for fully electric vehicles.
“After the acquisition, the company (Dongfeng) and Stellantis will further deepen their cooperation to support DPCA’s continued production of its existing Peugeot and Citroen as well as Fukang models,” Dongfeng said.
Stellantis said it will support the joint venture in exporting Peugeot 4008 and Peugeot 5008 models to ASEAN countries, and Citroen C5X model to Europe.
The acquisition will help Dongfeng consolidate its in-house new energy passenger vehicle businesses, Dongfeng said in a stock exchange filing. ($1 = 7.3173 Chinese yuan renminbi)
(Reporting by Himanshi Akhand and John Biju in Bengaluru; Editing by Savio D’Souza and Shinjini Ganguli)
