AutoBeta(AutoBeta.net)11/11 Report--

French car brands in 2019 have repeatedly stressed that they "will not withdraw from the Chinese market", but the more they emphasize, the more problems they will have. Shenlong Motor has closed its factory, Renault sales have plummeted, DS has been abandoned by Changan, and the days of French car brands in China have become more and more miserable, and one by one is getting worse.

The China Automobile Association announced today that French brands have only 0.7% of the market share in China from January to October, down half from 2018. Peugeot, Citroen, Renault and DS together account for less than 1 per cent of the Chinese car market, so how can they survive in the cold winter of the car market?

Dragon selling factory

According to KuaiBao, Dongfeng Motor Group's production and sales in October, DPCA's October sales were 9730, down 47.4% from a year earlier, and its cumulative sales from January to October this year were 100779, down 54.83% from a year earlier. DPCA, which owns both Peugeot and Citroen brands, has an average monthly sales of only about 10,000 units, with brand and sales falling into a double trough.

"We are only one step away from having to withdraw from China," a person close to the board of Peugeot Citroen said in an interview with foreign media. It's really that serious. The problems left over by Shenlong have been widely criticized, resulting in today's dilapidated situation, not without the factors of market environment and product decision-making, but the internal factors of "human" may be the main cause.

It was only after a serious decline in sales and continued losses in performance that DPCA realized that it was in urgent need of change. Since the second half of last year, Shenlong has carried out many rounds of overall reform of its internal institutions and departments, and senior personnel have been adjusted frequently, first of all to solve the problem that the decision-making mechanism is too slow, and all actions have to recover the lost market share.

The agreement reached between China and France on DPCA's internal control level for the first time in history this year has changed the previous situation of poor cooperation between China and France, according to an internal document. Formally run the new organization and abolish the existing lengthy mechanism that both China and France need to sign a double signature for each transaction.

Under a loss of 2.5 billion yuan in the first half of the year, DPCA launched a plan to reduce operating costs, first closing a factory in Wuhan and selling a second factory in Wuhan, leaving three factories in Wuhan and a factory in Chengdu to continue production and operation; and started layoffs, from 8000 employees to 5500 by the end of 2019 and to 4000 by 2020.

The two sides have also reached a new consensus on the direction of future development. In September, DPCA released a "yuan" revival plan, which plans to improve its products, marketing and operations. Including the launch of 14 new models in the next three years, products are more localized, product pricing is more pragmatic; pay attention to dealer profits, the implementation of dual-brand collaborative management; the operating mechanism is efficiency-oriented and so on. DPCA also plans to make a steady profit from 2020 to 2021, with annual sales rising to 250000 and the break-even point reduced to 150000.

Tang Weishi, chairman of the PSA Group, said publicly many times that "We want to stay in China and absolutely do not want to leave China. This belief is very firm."

Renault sales plummeted by 70%

Dongfeng Renault sales figures for October were 1220, down 52 per cent from a year earlier, and cumulative sales from January to October this year were 13137, down 72.3 per cent from a year earlier.

Renault and Dongfeng Motor Group finalized a partnership at the end of 2013 to launch two domestic SUV models, Correa and Coreao, in 2016, with sales of 36525 units that year and jumped to 72000 in 2017. However, due to problems such as low brand awareness and stagnation of its own products, Renault sales declined one after another, falling to 50,000 units in 2018. Under the cold winter of the market, Renault is falling off a cliff in 2019, and the market situation is more severe.

Renault has been losing ground in the Chinese market, and Renault has quickly changed its coach. On April 1 this year, Dongfeng Renault hired GE Shuwen, who once worked in Audi China, as president of Dongfeng Renault Motor Co., Ltd. and vice president of strategic coordination of Renault Group in China, seeking to reverse the declining performance of the Chinese market.

Hong Hao, vice president of Dongfeng Renault, said in an interview, "Renault has three major shortcomings in the Chinese market." First, it lacks brand power, and its popularity and reputation are relatively low; second, the product line is relatively narrow, with only four SUV models, which do not cover cars; and third, dealers' channel capacity is weak, network coverage is not scientific and reasonable, and many dealers lack the ability and experience to resist risks. "

In terms of products, Dongfeng Renault plans to launch one domestic car and import one car each year in the next three years, with 11 models on sale by 2022 and fully electrified by 2025.

DS abandoned by Chang'an

After eight years of joint venture, Changan Motor announced in October at the Chongqing United property Exchange that it would sell a 50 per cent stake in Changan PSA and was about to withdraw from the Changan PSA joint venture, saying it had lost nearly $700m (about 4.9 billion yuan) in the past six years.

Changan PSA was jointly established in 2011 by Changan Automobile Group and French PSA Group, each accounting for 50% of the equity. Changan PSA has a factory in Shenzhen with an annual production capacity of 200000 vehicles, mainly producing and selling high-end DS brand models of PSA Group. Since the DS brand model was made in China, the sales volume has been low and failed to change the current situation of continuous loss-making operation, which is an important reason for Changan Automobile to choose to withdraw.

A spokesman for PSA Group said, "thanks to Chongqing Changan Automobile for its support over the past eight years, the DS brand will continue to stay in China and develop vigorously and will not withdraw from China."

The DS brand peaked at 27000 in 2014 and 2015, then plummeted, falling to 16000 in 2016, 5800 in 2017 and 3867 in 2018. From January to September 2019, the cumulative sales of the DS brand were only more than 2000 vehicles, with almost no way out.

PSA said, "the DS brand will adopt a new strategic approach to continue to develop our business in the strategic market of China." Peugeot Citroen is fully committed to the Chinese market. "

With the continuation of the cold winter of the car market, the Chinese market has entered the stock competition, the knockout stage of the automobile industry has begun, and those relatively backward joint venture car companies and marginal brands face the risk of delisting at any time. French car brands have fallen into a low ebb in China, and only by making changes can they survive, and it is all the more necessary to avoid repeating the same mistakes.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat