Dongfeng Brings Access to Peugeot: Meilhan

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Feb. 19 (Bloomberg) -- Nicolas Meilhan, Senior Consultant at Frost & Sullivan, discusses Peugeot’s earnings and Dongfeng’s stake in the company. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

Here.

Peugeot stock up by 4.8%. is that for all the right reasons?

There is a couple of reasons it can go up.

The good news is they are burning six times less cash than last year.

They are doing good.

The big news of the day is the agreement with dongfeng which is going to provide them with some financial support, financial means to reinforce r&d. a couple of other things, hybrid technology which is a very good technology which will be developed with dongfeng.

Also, what peugeot was missing compared to renault is they will be able to develop a low-cost car platform with dongfeng which will be manufactured in china to be sold in southeast asia.

And in eastern europe the sold in europe.

It is good news.

Some investors are concerned about the complicated nature of the management structure at this business now and you have the family, the french government, the chinese carmaker.

They all have slightly different input -- different interests involved.

Exactly.

When talking about this deal, that was one point of concern.

One of the problems that tsa had was, they might have to reduce capacity.

The state and the government wouldn't agree because they want to save employment.

That is one point of concern.

If you look at renault, the state has 15% stake.

They have still been able to reduce operation capacity.

How much opportunity is there for peugeot in china?

We have seen a lot of concern about credit conditions in china.

Some people talk about the availability of credit, pollution increasing as well.

What opportunities are there for the french auto maker?

China is the biggest growing market.

Psa with dongfeng plan to be another force that would make the capacity of 900,000 cars in china.

The real interesting thing in china is this hybrid air technology which makes hybrid vehicles which consume air.

Those cars might fall into the quota for a sales restriction.

There is a marketing china and there is a market for clean vehicles.

That is comparable to toyota with the previous.

-- the prius.

It would give them a competitive edge.

Where is the flow of knowledge going to go from and to?

Is it going to be a one-way street from france to china?

Obviously, dongfeng are beginning to attract more manufacturers.

They are interested in the platform that they have for their vehicles.

They want to leverage those technologies.

There is more and more people getting into china.

There would be a transfer there.

What you have to say is that now psa is going to have unlimited financing.

If you look at what happened to volvo, they were given over $1 billion and another $1.5 billion gave them some way of investing in r&d and innovation to improve their position.

That is a very important factor that dongfeng is going to provide.

Thank you very much for joining us.

Here are some of the companies that are on the move this morning.

Carlsberg reported fourth-quarter profits that beat analyst estimates as the company gained market share.

Carlsberg is looking to expand in markets including asia to counteract slowing growth in europe.

It is seeking to reduce its

This text has been automatically generated. It may not be 100% accurate.

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