Auto JVs to benefit from cheap EU imports

SINGAPORE - PSA Peugeot Citroen and Volkswagen AG's joint ventures in China will benefit as a weaker euro reduces the cost of components imported from Europe, Nomura Holdings Inc analysts said.

Dongfeng PSA, a partnership between France's Peugeot and Hubei-based Dongfeng Motor Group Co, will be the biggest beneficiary, Hou Yankun, an analyst at Nomura, said on Tuesday. A 15 percent drop in the euro may boost earnings at Dongfeng PSA by as much as 5 percent or 250 million yuan ($36.6 million), Hou and fellow analyst Xu Ming wrote in a report this week.

For European carmakers in China, the world's largest auto market, "the import of components from their home countries is one way to make profit", Hou, based in Hong Kong, said.