Dongfeng, Peugeot inks deal officially, capital injected

"We don't doubt PSA's ability to capture additional share in a Chinese premium market that is growing very strongly but caution (against) too much optimism," Erich Hauser, of International Strategy & Investment, said in a note.

Meeting the company's goal of a 10 percent share of the premium market would require its network of 56 Chinese DS dealers to expand at an unlikely rate and match the 2012 sales of Mercedes-Benz through 262 outlets, the London-based analyst said.

"With only 3,500 unit sales in China in 2013 there is nowhere near as much brand awareness for DS," he added.

Dongfeng's capital injection to give Peugeot new drive

Dongfeng Renault president lays out his vision

While Peugeot gave no geographical breakdown of last year's 2.32 billion euro loss, the carmaker has confirmed it is losing money in Latin America and Russia.

Tavares faces a long haul to restore profitability to plants in both regions, in part by reducing a heavy dependence on imported components that has left Peugeot critically exposed to a recent currency slide in emerging markets.

Peugeot's sales tumbled 16 percent in Brazil last year and 19 percent in Russia, with its outlook vulnerable to a weaker ruble and possible trade sanctions over the country's military incursion into Ukraine.

While rival Renault buys 80 percent of Russian parts locally, Peugeot is 70 percent import-dependent at the Kaluga plant it shares with Mitsubishi.

"Peugeot is small in Russia and has the wrong product," said UBS analyst Philippe Houchois, who predicts that its losses in the country may be worsened by the ruble's weakness.

In the saturated European market, which still accounts for 58 percent of the company's sales, Peugeot registrations have begun to bounce back after a six-year slump, rising 5.1 percent in the first two months of 2014.

Peugeot closed its Aulnay plant near Paris last year and may need to pursue more cost savings beyond the current recovery plan, Tavares said this month.

Pressed during his Europe1 radio interview on the possibility of further cuts, Robert Peugeot said on Wednesday that factory closures are "not currently part of the plan".