Posted Nov 28, 2019 at 9:05 pm
The “New strategic approach” PSA for its DS brand will result in the disengagement of its Chinese joint venture Capsa, says Reuters on Thursday. The plan to sell the shares of the manufacturer tricolor (50%) will be presented Friday to the unions, and will be studied later by the supervisory board.
Changan, PSA’s Chinese partner in this joint venture, had already announced its intention to withdraw. “Both partners intend to sell their shares in their joint JV Capsa. This does not call into question the presence and commitment in China of the DS brand, for which a new strategic plan will be presented in the coming weeks or months, “confirmed a spokesman for PSA.
Falling sales
This decision appears necessary for the French group, which saw its overall sales fall from 32% in China to about 263,000 vehicles, very far from the million units targeted several years earlier. The DS brand is particularly affected, while the bar of 5,000 copies sold should be painfully reached this year.
The Shenzhen plant, it should be ceded conglomerate Baoneng. The site will continue to produce DS, but subcontract for PSA, while building other models for other manufacturers. In case of high demand, the tricolor group will retain the ability to import vehicles.
Long regarded as an Eldorado, the Chinese car market now appears as a source of difficulties for PSA, which lost some 300 million euros last year. DPCA, its other joint venture with Dongfeng that produces the rest of the manufacturer’s brands, is also undergoing a drastic restructuring.