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Dongfeng and PSA extend Chinese joint venture

BEIJING/PARIS — China's Dongfeng and Peugeot maker PSA are extending their business cooperation, despite the Chinese company reducing its stake in PSA to help smooth the French carmaker's merger with Fiat Chrysler Automobiles (FCA). Dongfeng said on Thursday it had agreed with PSA to extend the duration of their joint venture Dongfeng Peugeot Citroen Automobiles (DPCA). Under the deal, the venture could get the rights to PSA's new brands in China and will benefit from new technologies and intellectual properties, the Chinese company said. PSA was not immediately available for comment. The announcement comes a day after the companies said Dongfeng would reduce its 12.2% stake in PSA by selling 30.7 million shares to the French company. Analysts said the move could smooth U.S. regulatory approval for PSA's roughly $50 billion (GBP38.97 billion) merger with Italian-American carmaker FCA. The sale of Dongfeng's shares in PSA, worth around 680 million euros ($757 million), will leave the Chinese group holding around 4.5% of the merged PSA-FCA, which is set to become the world's fourth-biggest carmaker by sales volumes. "As the cooperation between Dongfeng and PSA deepens, we expect the joint venture to continue making good progress in China," a Dongfeng representative said. On a conference call, Dongfeng said DPCA would have exclusive rights to PSA's Opel cars should the partners agree to bring the brand to China, and enjoy lower prices on car parts imported from PSA. Earlier this year, a document seen by Reuters showed Dongfeng and PSA plan to cut jobs at Wuhan-based DPCA and reduce its number of car plants to try to make the venture more profitable. Chrysler Dodge Fiat Jeep RAM Citroen Peugeot China FCA PSA Dongfeng

China's Geely says it has no plan to buy Fiat Chrysler — as FCA stock leaps

HONG KONG — Chinese carmaker Geely Automobile denied media speculation on Wednesday that it planned to make a takeover bid for Fiat Chryslerk Automobiles (FCA), the world's seventh-largest automaker. Geely was one of several Chinese carmakers cited in by Automotive News, which said representatives of "a well-known Chinese automaker" had made an offer this month for FCA, which has a market value of almost $20 billion. "We don't have such a plan at the moment," Geely executive director Gui Shengyue told reporters at an earnings briefing, when asked if Geely was interested in Fiat. He said a foreign acquisition would be complicated, but he did not elaborate. "But for other (Chinese) brands, it could be a fast track for their development," Gui added. However, a source close to the matter said FCA and Geely Automobile's parent firm, Zhejiang Geely Holding Group, had held initial talks late last year, without disclosing their nature. The source confirmed Geely was no longer interested in FCA, noting that the parent company had only three months ago announced its first push into Southeast Asia with the purchase of 49.9 percent of struggling Malaysian carmaker Proton, a deal that also included a stake in Lotus. Geel's denial failed to dent FCA's stock. The price of its Milan-based shares has jumped more than 10 percent to a 19-year high since Automotive News first reported on Monday, citing unnamed sources, that FCA had rejected the Chinese offer as too low. FCA stock on the New York Stock Exchange rose sharply on Monday from $11.60 to $12.38 and on Wednesday was trading at $12.84. FCA declined to comment on Wednesday. FCA Chief Executive Sergio Marchionne has repeatedly called for mergers as a way of sharing the costs of making cleaner, more advanced cars, but he has repeatedly failed to find a partner and retreated from his search for in April, saying FCA would stick to its business plan. He has also spoken of spinning the successful Jeep and Ram divisions off from FCA. Europe's largest carmaker, Volkswagen, and General Motors have both said they are not interested in talks with FCA. On Wednesday, Geely Automobile reported a doubling of first-half profit, above expectations, as cars designed with Sweden's Volvo won over domestic consumers. Volvo is a unit of the Zhejiang Geely group, and has recently announced it will share its technology with Geely.

Are supercars becoming less special?

There's little doubt that we are currently enjoying the golden age of automotive performance. Dozens of different models on sale today make over 500 horsepower, and seven boast output in excess of 700 hp. Not long ago, that kind of capability was exclusive to supercars – vehicles whose rarity, performance focus, and requisite expense made them aspirational objects of desire to us mortals. But more than that, supercars have historically offered a unique driving experience, one which was bespoke to a particular model and could not be replicated elsewhere. But in recent years, even the low-volume players have been forced to find the efficiencies and economies of scale that formerly hadn't been a concern for them, and in turn the concept of the supercar as a unique entity unto itself is fading fast. The blame doesn't fall on one particular manufacturer nor a specific production technique. Instead, it's a confluence of different factors that are chipping away at the distinction of these vehicles. It's not all bad news – Lamborghini's platform sharing with Audi for the Gallardo and the R8 yielded a raging bull that was more reliable and easier to live with on a day-to-day basis, and as a result it went on to become the best-selling Lambo in the company's history. But it also came at the cost of some of the Italian's exclusivity when eerily familiar sights and sounds suddenly became available wearing an Audi badge. Even low-volume players have been forced to find economies of scale. Much of this comes out of necessity, of course. Aston Martin's recent deal with Mercedes-AMG points toward German hardware going under the hood and into the cabin of the upcoming DB11, and it's safe to assume that this was not a decision made lightly by the Brits, as the brand has built a reputation for the bespoke craftsmanship of its vehicles. There's little doubt that the DB11 will be a fine automobile, but the move does jeopardize some of the characteristic "specialness" that Astons are known for. Yet the world is certainly better off with new Aston Martins spliced with DNA from Mercedes-AMG rather than no new Astons at all, and the costs of developing cutting-edge drivetrains and user interfaces is a burden that's becoming increasingly difficult for smaller manufacturers to bear. Even Ferrari is poised to make some dramatic changes in the way it designs cars.