DFG and PSA Enter into a Global Strategic Partnership Agreement

The participation of DongFeng Motor Group Co., Ltd. (hereinafter referred to as DFG) in PSA (hereinafter referred to as PSA) is not only a knockout capital operation but also heralds the beginning of deep cooperation between both sides in the full-value chain. Soon after they signed a capital increase and equity participation agreement in Paris on March 26th, DFG and PSA signed the Global Strategic Partnership Agreement in Beijing on March 28th. At the signing ceremony hosted by General Manager of DFG , the Global Strategic Partnership Agreement was signed by Chairman of DFM Xu Ping, Chairman of the Executive Committee of PSA Philippe Varin and Member and Incoming Chairman of the Executive Committee of PSA Carlos Tavares on behalf of their respective sides.

In light of the Global Strategic Partnership Agreement, DFG and PSA will deepen their cooperation in an array of fields including international business, commodities & technologies coordination, purchase & supply system coordination and so on. In terms of international business, both sides will jointly set up an export company in charge of DPCA and PSA's product sales and services in the Asia-pacific region, seek to develop the export company's business in those markets beyond the Asia-pacific region and build a synergistic export effect between the export company and the DongFeng brand with a view to jointly exploiting the Asia-pacific market and other emerging markets and promoting the network's sharing, coordination and development to jointly develop a complete vehicle platform, modules, vehicle models and passenger vehicle parts tailored to emerging markets and to assist the opposite side in developing its brand business by virtue of their existing or prospective strengths (like production capacity and business network) in their respective regions or countries.

In terms of commodities & technologies coordination, both sides will integrate PSA's existing Asia-pacific technology centers, set up a new R & D center and cultivate the R & D capability in China for the product's full value chain involving preliminary study, modeling, commercialization, etc. In addition, both sides will intensify the coordination of their respective R & D centers, share resources, improve R & D efficiency and curtail R & D costs. Both sides also intend to expand DPCA's scope of cooperation and propel DPCA to sell 1.50 million units of DongFeng Peugeot, DongFeng Citroen and DongFeng automobiles per year by 2020. Moreover, both sides plan to develop and launch into the market at least one new vehicle model for each of the said three brands. In a worldwide scope, both sides will strengthen their cooperation in core new energy fields including new-energy vehicle technology R & D and new-energy vehicle model development. Both sides will realize their coordination in the product platform, power train, parts & components and so on in order to improve the PSA and DFG platform's scale effect and sharpen the competitiveness of its products.

In terms of purchase and supply system coordination, both sides will make joint plans at the phase of product development to establish and consummate the supply system and corresponding operation mechanism in an effort to cut down the costs. Moreover, both sides will discuss how to coordinate relations amongst global suppliers and establish a synergistic supply chain system and mechanism. Furthermore, both sides agree that in a worldwide scope, PSA should promote and apply DFG and DPCA's achievements for reduction of product cost in order to further curtail PSA's purchase costs and strengthen its product competitiveness.

To put in practice, coordinate and push ahead with the running of this global strategic partnership, both sides will jointly set up a global strategic partnership committee and clearly define the goals and specific implementation plan in connection with their cooperation in international business, coordination in products and technologies and coordination in a purchase and supply system by the end of 2014.

In the wake of the signing ceremony, DFG and PSA jointly held a press conference concerning their global strategic partnership.

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