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As one of the important partners of Stellantis Group, the world's fourth largest carmaker in China, Dongfeng Motor Group is gradually moving away from the multinational carmaker's business in China.

On November 23rd, Stellantis Group official account said that Stellantis and Dongfeng Motor (Hong Kong) International Co., Ltd., a subsidiary of Dongfeng Group, confirmed that they had executed a transaction in which Stellantis would buy back 50 million Stellantis common shares (1.58% of Stellantis's share capital before the cancellation of the shares) from Dongfeng Group, for a total consideration of 934 million euros. Stellantis plans to write off the shares. Upon completion of the transaction, Dongfeng Group will hold 49.2 million common shares of Stellantis Group, accounting for 1.58 per cent of Stellantis's share capital. In other words, in this round of transactions, Dongfeng Group sold more than half of its stake in Stellantis Group.

In 2014, Dongfeng Motor Group bought a 14.1% stake in PSA Group for 800m euros. In 2019, PSA Group bought back 10 million shares of PSA common stock from Dongfeng Automobile Group. At the end of the same year, Dongfeng Motor Group continued to sell 30.7 million shares of PSA Group. In January 2021, PSA Group merged with FCA Group to form Stellantis Group, and Dongfeng Motor Group's PSA shares were converted into Stellantis shares, with a shareholding ratio of 5.62%.

In fact, there is a sign that Dongfeng Group broke up with Stellantis. In January 2022, Dongfeng Motor Group announced that it plans to sell up to 40 million Stellantis common shares with a total value of 732 million euros (about 5.257 billion yuan) through its wholly-owned subsidiary Dongfeng Motor (Hong Kong) International Co., Ltd.

In July 2022, Dongfeng Motor Group and Stellantis Group signed a framework agreement on Dongfeng's 99.2 million shares of Stellantis common shares (3.16% of Stellantis's share capital) held by Dongfeng. Under the agreement, Dongfeng may make an offer to Stellantis from time to time to sell all or part of the common shares of Stellantis held by Dongfeng. Stellantis said it had the right but no obligation to accept these offers and buy the shares in the offer on the average of the closing price per share on the Milan electronic stock market in the five trading days before Dongfeng submitted the offer.

In the Chinese market, a joint venture between Dongfeng Automobile Group and Stellantis Group, Citroen Motor sold a total of 69584 vehicles from January to October 2023, down 33.74% from 105013 in the same period.

Just last month, Dongfeng Motor Group disclosed that it had signed an "asset transfer agreement" with DMC to buy specific land use rights, buildings and structures in Wuhan and Xiangyang for 1.714 billion yuan. At the same time, the two sides reached a leasing arrangement under which Dongfeng Group will lease the target assets to DPCA for a term of 10 years. It is understood that the target asset is mainly the third plant of DPCA in Wuhan, which is mainly used to produce existing Peugeot and Citroen passenger cars as well as Fukang models.

With regard to the acquisition of DMC target assets, Dongfeng Group explained that, on the one hand, it supports DMC in developing new models and promoting the transformation of new energy sources of DMC; on the other hand, this acquisition and leasing arrangement enables Dongfeng Group to make full use of existing production capacity, which is conducive to giving full play to the synergy of the group's manufacturing resources.

In this announcement, Dongfeng Group and Stellantis Group, the foreign shareholder of DPCA, reiterated that the governance model of DPCA remains unchanged, the share ratio of China and France remains unchanged, and the shareholders of China and France will continue to implement the strategic cooperation agreement signed in 2019 and continue to support the sustainable development of DPCA. Stellantis also said that with the support of both shareholders, Citroen will continue to build and sell Peugeot and Citroen brand models in the Chinese market, and Stellantis will support it in marketing. In addition, Citroen will continue to export Peugeot and Citroen models to the world, Peugeot 4008, Peugeot 5008 to ASEAN and Citroen C5X to Europe. At the same time, it will help DPCA through the transformation of new energy.

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