Peugeot and Citroën to Benefit from Stellantis–Dongfeng Partnership
According to the president of Stellantis South America, the group’s French brands will be the primary beneficiaries of the company’s partnership with China’s Dongfeng.
During its global investor presentation outlining investment plans through 2030, Stellantis South America drew attention by making no mention of Peugeot or Citroën in its strategy for Brazil. The omission raised numerous questions about the future of the two French brands in the Brazilian market.
Speaking with journalists on Wednesday evening (July 8), Hernander Zola, President of Stellantis South America, stated that the company has plans for both Peugeot and Citroën in Brazil, particularly because both brands “remain very strong in other South American markets.” Their future is directly tied to a new agreement with Chinese automaker Dongfeng involving shared vehicle platforms and the joint development of new products tailored to the region.
Peugeot to Move Upmarket While Citroën Becomes a Niche Brand
During the interview, the executive acknowledged mistakes in the management of both brands and promised a complete repositioning. According to Zola, both Peugeot and Citroën will become “niche” brands in the Brazilian market. Peugeot, in particular, will move into a premium position, focusing on lower-volume, higher-value vehicles. Zola did not provide specific details regarding Citroën’s new strategic direction.
“When Stellantis was formed, we had to continue with many of the plans for Peugeot and Citroën that had already been established and could no longer be reversed, including major investments in new platforms and products. We made several adjustments, but at that time, the strategy was for both brands to compete with Fiat. Today, we recognize that this competition no longer makes sense. We are seeking a more complementary product portfolio,” explained Hernander Zola, President of Stellantis South America.
Existing Product Lines Will Be Gradually Phased Out
Zola’s comments make it clear that Peugeot and Citroën will gradually exit the entry-level vehicle segment. This signals the eventual phase-out of the current lineup produced in the region, including the Citroën C3, Aircross, and Basalt manufactured in Porto Real, Rio de Janeiro, as well as the Peugeot 208 and 2008 built in El Palomar, Argentina.
“Of course, this won’t happen overnight. It’s a process that will take several years. First, these products need to generate a return on the investments that have already been made,” he said.
Returning Peugeot Production to Brazil
According to Zola, one of the most critical decisions affecting Peugeot was the complete transfer of the brand’s production to Argentina.
“That decision was made under a very different market environment and a different trade relationship between Brazil and Argentina, but it ended up severely limiting our operation,” he explained.
One solution already under consideration is to resume production of at least one Peugeot model in Brazil. This is where Dongfeng enters the picture. In Brazil, the Chinese automaker will operate under the name DFM, as previously reported.
Dongfeng Platforms Will Underpin Future Peugeot and Citroën Models
The President of Stellantis South America was emphatic that the partnership between Stellantis and Dongfeng will lead to the development of new vehicles specifically for the Brazilian market, with Peugeot—and, to a lesser extent, Citroën—as the primary beneficiaries.
“I don’t yet know whether this cooperation will involve joint manufacturing in Brazil, but what I can state categorically is that we will have Peugeot and Citroën vehicles developed using Dongfeng platforms and engineering participation,” he emphasized.
These vehicles will not necessarily be based on the Peugeot Concept 6 and Concept 8 unveiled at the 2026 Beijing Auto Show. Instead, they will be products designed specifically for South America, built on Dongfeng platforms and likely manufactured locally.
Future Manufacturing Plans Under Evaluation
According to the website Autos Segredos, a next-generation Peugeot 3008 midsize SUV is currently under development for production at Stellantis’ Goiana, Pernambuco plant beginning in 2030. However, it remains unclear whether the model will use Dongfeng’s Chinese platform or Stellantis’ STLA Medium architecture, which will underpin the next-generation Jeep Renegade, Compass, and Commander.
An even more likely scenario is that the technical partnership between Stellantis and Dongfeng will result in entirely new vehicles being produced at the Porto Real, Rio de Janeiro plant, replacing the current low-cost Citroën models assembled there.
Zola also acknowledged that Stellantis is studying the possibility of manufacturing vehicles under the DFM brand at its Brazilian factories. While he did not provide additional details, it has recently been reported that Dongfeng is also negotiating the acquisition of the former Campo Largo, Paraná, engine plant.
Dongfeng’s Separate Talks with Nissan
In addition to its discussions with Stellantis, Dongfeng is reportedly negotiating a potential manufacturing partnership with Nissan. According to Zola, however, Stellantis has no intention of participating in a three-way arrangement.
“Either Dongfeng will manufacture with Nissan or with us. Producing with both companies simultaneously is, in my view, virtually impossible,” he concluded.
Stellantis’ Fastlane 2030 Strategy for Brazil
Beyond its plans for Peugeot and Citroën, Stellantis’ Fastlane 2030 strategic plan for Brazil includes:
- A next-generation Fiat Argo;
- Three new Fiat SUVs, including updated Pulse and Fastback models, plus an all-new seven-passenger SUV;
- Next-generation Jeep Renegade, Compass, and Commander SUVs;
- New generations of the Fiat Strada, Fiat Toro, and Ram Rampage pickups; and
- An all-new flex-fuel full hybrid (HEV) powertrain.