(Yicai Global) Sept. 29 -- Dongfeng Peugeot Citroen Automobile, the unprofitable Chinese joint venture of Dongfeng Motor and France's PSA Group, will receive a EUR50 million (USD58.4 million) capital injection from PSA in the fourth quarter.

State-owned Dongfeng Motor will also chip in financial support, Wuhan-based DPCA said in a statement yesterday, adding that its parent companies also decided to boost the JV’s capital and shares in the first quarter of next year.

"The specific amount is still being negotiated, but it will be a large amount of money," an insider at DPCA told Yicai Global, adding that the carmaker will remain a 50-50 JV.

DPCA reported a net loss of CNY1.3 billion (USD191 million) in the six months ended June 30 due in part to a two-month closure of its plant in Wuhan, where the novel coronavirus outbreak was first detected. It sold just 26,342 vehicles in the first seven months of 2020, less than a 10th of its annual target.

Formed in 1992, DPCA's sales peaked at more than 700,000 vehicles in 2016 and plunged to 113,600 last year amid a general downturn in the Chinese auto market.

PSA also plans to provide DPCA with about CNY100 million (USD14.7 million) in annual funding from this year to 2037 to develop it brand image and channels.

In a bid to help turn around the situation at the JV, Chen Bin, appointed by Dongfeng Motor, took over from Massimo Roserba as general manager this month. And aiming to strengthen the power of the DPCA management team and decision-making, the JV also dropped a previous arrangement whereby Dongfeng and PSA sent a senior executive at the GM level

Chen, the new GM, will also have the right to advise on the appointment and removal of PSA’s senior management posted at DPCA, Yicai Global learned. Its senior foreign managers used to report directly to PSA’s superiors, with PSA also ruling on their appointment and removal.

Editors: Tang Shihua, Peter Thomas