Dongfeng mulls 30% stake in PSA Peugeot

"Why can't Dongfeng purchase the stake in PSA, after we saw Geely's successful acquisition of Volvo in 2010?" said Du Fangci, an official with the China Association of Automobile Manufacturers.

"This would be a win-win deal as PSA needs capital investment while Dongfeng requires world-leading technology to strengthen its self-developed vehicles," said Du.

"The French government will always support PSA, one of the largest companies in the country, so an investment in PSA wouldn't bring any huge risks to Dongfeng," added Zhong.

Furthermore, Zhong said that if Dongfeng becomes a major shareholder in its partner PSA, the Chinese company could see a more stable future for its joint venture, Dongfeng Peugeot Citroen Automobile Co Ltd, in the long run, and more importantly, would have more influence in the joint venture.

Even though PSA saw its sales and revenue drop globally, its sales in China, through the joint venture with Dongfeng, rose 32.7 percent in the first half of the year, contributing 30.7 billion yuan in revenue to the French company.

Starting in May, China became PSA's largest market globally.

"We hope that if the stake takeover deal gets done, Dongfeng can benefit from PSA for its self-developed branded products, and make their joint venture more competitive," said Zhong.

"And we're glad to see that Chinese automakers are now becoming stronger and more powerful in the global automotive market, as they're starting to change their roles from partners to investors in international automakers," Zhong added.