PSA Peugeot Citroen announced a 3 billion euro ($4.1 billion) tie-up with China's Dongfeng Motor Group <0489.HK> on Wednesday as the French carmaker posted a further loss for 2013.

Dongfeng and the French state will each pay 800 million euros for a 14 percent stake in the carmaker, Peugeot said in a statement. The companies will add new models in Asia to target 1.5 million annual sales soon after 2020.

Peugeot said its full-year net loss narrowed to 2.32 billion euros from 5.01 billion in 2012, when the bottom line was hit by asset writedowns. Sales fell 2.4 percent to 54.09 billion euros.

($1 = 0.7272 euros)

(Reporting by Laurence Frost; Editing by James Regan)