January 25, 2014 / 12:47 PM / 5 years ago

Tavares could take helm of Peugeot in March: sources

PARIS (Reuters) - Carlos Tavares could take over as chief executive of PSA Peugeot Citroen PEUP.PAP in March, two sources close to the situation said.

Carlos Tavares poses after the company's First-Half 2013 results presentation in Boulogne-Billancourt, near Paris in this July 26, 2013 file picture. REUTERS/Benoit Tessier/Files

Tavares, the former second in command at rival Renault (RENA.PA), joined the loss-making French carmaker as CEO-in-waiting on January 1.

Peugeot, which is in talks on a capital injection from the French government and China’s Dongfeng Motor Co. (0489.HK), had previously only said that he would take over from current boss Philippe Varin sometime this year.

“Some observers had thought Tavares could take over by February 19 when Peugeot announces its annual results. That was the plan ... but Philippe Varin wants to remain in his post until the Chinese president visits France in March,” said one of the sources.

“Given that Varin played an important role in the Dongfeng deal, it is completely possible that the replacement can wait until March,” the source said.

A spokesman for Peugeot declined to comment.

Peugeot Chairman Thierry Peugeot told Le Figaro newspaper in an interview published on Saturday that the board would soon decide on the official date of the CEO transition.

Peugeot’s board has agreed in principle to a capital increase that would see the Chinese state-owned carmaker and French government acquire minority stakes and the founding family cede control, sources familiar with the matter said on Monday.

The company is looking to raise 3 billion euros ($4.1 billion) in a deal with Dongfeng, after unveiling a further 4.9 percent decline in global vehicle deliveries for 2013.

Peugeot has said it needs fresh funding to stay competitive amid slumping car sales in its core European market and is also seeking to deepen its relationship with Dongfeng, with whom it already has a joint venture.

The two carmakers have been in discussions for months to extend cooperation to other Asian countries, backed by a multi-billion-euro share issue in which Dongfeng and the French government would acquire significant stakes.

China’s Xi Jinping is expected to make his first trip as president to Europe in March, to meet the country’s most important export partners after a year of trade tensions, EU diplomats have said.

Reporting by Gilles Guillaume; Writing by Leila Abboud; Editing by Pravin Char

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