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A spokesman for French car manufacturing trademark Citroen Group (PSA) officially announced today that the company plans to sell 50% of Changan Peugeot Citroen Motor Co., Ltd. (Changan PSA), a joint venture with Changan Motor.

Wang Chao, director of corporate communications for China and Southeast Asia of PSA Group, confirmed the news and responded that PSA Group and Chongqing Changan Automobile Co., Ltd., both shareholders of Changan PSA, plan to sell their shares in Changan PSA to a third party and plan for a third party to take over the Shenzhen plant.

Wang Chao expressed the hope that all staff of Changan PSA will continue to serve the company after the future new shareholders take over the company, and will choose the right time to disclose the new strategy for the development of the DS brand in China. After the change in the share structure of Changan PSA, the DS brand plans to continue to produce DS cars in the Shenzhen factory.

It has been revealed that Baoneng will fully acquire Changan PSA, but the news has not been confirmed by Changan Automobile and PSA.

It is worth noting that Chang'an sold a 50 per cent stake in the joint venture at a listing price of 1.63 billion yuan. Changan Motor, one of the partners of Changan PSA, disclosed the sale of a 50 per cent stake in Changan Peugeot Citroen Motor Co., Ltd. at the Chongqing United property Exchange on October 28th. Today, Changan Automobile formally submitted an application for listing and transfer, the listing price is 1.63 billion yuan, and the listing expiration date is December 26th.

According to public data, Changan Automobile and Peugeot Citroen Group invested a total of 7.6 billion yuan to establish Changan Peugeot Citroen Motor Co., Ltd. (Changan PSA) on November 16, 2011. both sides hold 50 per cent shares in the joint venture. Changan PSA has a factory with an annual production capacity of 200000 vehicles in Shenzhen, which mainly produces and sells high-end DS brand models of PSA Group, and currently has DS5, DS6, DS7 and other products.

However, the development of Changan PSA in China is not smooth, due to product positioning, pricing and brand and other reasons, sales remain depressed, operating losses.

Data show that Changan PSA sales of the DS brand reached a peak of 27000 vehicles in 2014 and 2015. I thought DS could make great strides, but DS sales began to decline sharply in 2016, with cumulative sales of only 16000 vehicles, compared with 6088 in 2017 and 5478 in 2018.

In 2019, the auto industry has changed, and sales of the DS brand have hit a new low. DS sold 2030 vehicles in China from January to October in 2019, of which only 10 were sold in October, which is on the verge of delisting.

The continuous decline of DS brand sales has caused Changan PSA to fall into a long-term loss. Changan PSA lost 870 million yuan in 2018, Changan PSA lost 200 million yuan in the first three quarters of 2019, and now Changan PSA has a cumulative loss of 2.455 billion yuan.

Throughout the development of the DS brand, it is a pity. DS brand to design, process or materials as the selling point, the market positioning is relatively special, but continue to be not recognized by the market, the main reason is the brand and product problems. The pricing of DS3, DS4 and DS5 models is on the high side, among which the price of imported DS5 is close to 300000 yuan, which is full of strong competitive products in the same class. In addition, the design style is too aggressive and alternative is also an important reason why consumers do not buy it.

It is worth mentioning that before Changan Automobile and PSA Group announced their withdrawal from the joint venture, Fiat Chrysler (FCA) and Peugeot Citroen Group (PSA) officially announced a merger, each with a 50% stake in the combined company, with a market capitalization of about $49 billion, making it the fourth largest carmaker in the world. The merger of PSA and FCA will also have an impact on the future development of the DS brand, especially the strategy of the Asian market.

Of course, in the face of the continued decline in DS sales, PSA Group will not let go. In the past year, DS has also accelerated the development of electrification. At the Shanghai auto show, DS showed off four new electric cars; at the Chengdu auto show, DS said it would launch six models in China within 2024. Originally, the market thought that the DS brand at the Guangzhou Auto Show would bring domestic DS9 models, but unfortunately DS did not participate in the exhibition.

In the face of the increasingly severe market environment, the relevant person in charge of DS has said that the DS brand has taken new energy as the strategic development direction in the future, and new cars in the next few years will provide new energy versions, including pure electric models or plug-in hybrid models. After 2025, DS models will be fully new energy, and the proportion of new energy models will reach 100%.

The development of DS brand in China is bumpy and tortuous, for the dissolution of Changan PSA and the current situation of DS brand, it may be expected in the eyes of many people. PSA Group said that after the sale of all its shares in Changan PSA, the DS brand will remain in China and develop vigorously and will not withdraw from the Chinese market.

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