Peugeot looks to Dongfeng for deal

French carmaker Peugeot is hoping to strike a deal with Dongfeng Motors (0489.HKG) after General Motors (GM.NYSE) took a 7% stake in PSA Peugeot Citroen (UG.EPA) in February 2012 but has scaled back its cooperation with the company, Reuters reported, citing unnamed sources familiar on the matter. Peugeot Chief Executive Philippe Varin has turned to Dongfeng amid mounting concerns over the company’s finances. On Monday, Peugeot’s shares fell by 9.1% after it was reported the company was preparing a US$4 billion capital increase which would be matched by Dongfeng in buying stakes of between 20% and 30%.