Struggling French automaker PSA Peugeot Citroen said Monday it had recruited the former No. 2 of its competitor Renault to take over as its chief executive next year.

“After conducting extensive research, the Supervisory Board chose Carlos Tavares to succeed the current president of the Managing Board,” PSA Peugeot Citroen said in a statement.

It said Tavaras, a former chief of operations at Renault who also held management posts at its Japanese ally Nissan, would join the board on Jan. 1 and succeed Philippe Varin as chief executive during 2014.

PSA Peugeot Citroen shares jumped 5.1 percent to 10.75 euros on expectations of Tavares’ appointment and the announcement of a deal with Iran that will lead to temporary relaxation of sanctions in what was formerly a key market for the carmaker.

During the transition, Varin will continue carrying out strategic discussions begun with various partners while Tavaras will begin working on efforts to turn around the company’s fortunes, the statement said.

“By choosing Carlos Tavares, renowned automotive industry professional, to succeed Philippe Varin in 2014, the Supervisory Board ensures that the strategy of recovery and development to overcome the current crisis, a strategy that has been carried out for several years, will continue to be executed over the long term,” said Thierry Peugeot, chairman of the Supervisory Board.

Tavares’ appointment at Peugeot comes amid other reports that the company is still in negotiations with Chinese carmaker Dongfeng about a potential capital injection. (AFP)