Peugeot CEO says eyes various options in Dongfeng talks

FRANKFURT (Reuters) - French carmaker PSA Peugeot Citroen is examining various ways of expanding its partnership with China's Dongfeng <0489.HK>, Chief Executive Philippe Varin told a German newspaper.

"It would make sense to deepen the partnership... I won't rule anything out," German daily Die Welt cited Varin as saying in an excerpt of an article to be published on Saturday.

French newspaper Le Monde reported this week that PSA was seeking to raise 4 billion euros (£3.33 billion) in a share issue to the French government and Dongfeng.

Peugeot has so far consistently declined to comment on the Dongfeng talks or capital increase plan.

Asked about the reported plans for Dongfeng to take a stake in a capital increase, Varin told Die Welt: "First you have to find the right industrial projects, then you worry about the necessary financing. You shouldn't put the proverbial cart before the horse."

Under their Chinese DPCA venture, Peugeot and Dongfeng jointly manufacture vehicles including the Citroen C5 mid-sized car and Peugeot 3008 minivan.

Peugeot, among the worst casualties of a six-year European car sales slump, is seeking more cooperation with Dongfeng or another automaker as it struggles to cut costs and losses that have threatened its survival.

But Varin played down Peugeot's financial difficulties in his interview with Die Welt.

"At the end of June, we had credit lines worth 11 billion euros. So we can take the time that we need to define the best industrial project for our future," he told the newspaper.

(Reporting by Maria Sheahan; Editing by Eric Walsh)