AutoBeta(AutoBeta.net)11/30 Report--

On November 29th, Peugeot-Citroen (PSA) announced that it would sell 50 per cent of Changan Peugeot-Citroen (Changan PSA), a joint venture with Changan Motor, and would review the planned sale of Changan PSA shares on December 6th.

On the day PSA announced plans to sell 50 per cent of Changan PSA, a PSA spokesman confirmed that China Baoneng was one of the potential buyers for a 50 per cent stake in Changan PSA.

On October 28th, Chongqing United property Exchange disclosed that Changan Automobile transferred its 50 per cent stake in Changan PSA, and on November 29th, Changan Automobile was transferring its 50 per cent stake in Changan PSA for 1.63 billion yuan.

According to data, Baoneng Group was founded in 2000, with a registered capital of 300 million yuan, and Yao Zhenhua is its only shareholder.

In 2017, Baoneng Group acquired a 51 per cent stake in Guanzhi for 6.63 billion yuan and acquired the production qualification of Qoros Automobile. It is understood that Baoneng Group has established new energy vehicle production bases in Guangzhou, Hangzhou, Kunming, Shaanxi and Guiyang, with a planned production capacity of more than 2.3 million vehicles.

It is worth noting that Qoros sold only 15000 vehicles in 2017, while Qoros sales made a leap after Baoneng took a stake. In 2018, Qoros sales reached 63000, an increase of 315% over the same period last year. This achievement makes the industry look at Qoros with new eyes and Baoneng with new eyes.

However, sales have gradually declined because Qoros has not launched a new model for a long time. In the first half of this year, Qoros sold a total of 7343 vehicles, down 75.94% from the same period last year, most of which came from Baoneng Linkage Cloud.

As for why Baoneng bought PSA, perhaps only Baoneng knows. However, according to Yao Zhenhua's plan, its target is to reach more than half of the group's revenue by 2027, and Quan Ji, which has already been acquired, obviously does not meet Baoneng's requirements.

It is understood that Changan PSA was established on November 16, 2011, with a total investment of 7.6 billion yuan by Changan Automobile and PSA Group, each holding 50 per cent of the company.

Changan PSA mainly produces high-end products of the DS brand. Since it was put into production in 2013, Changan PSA has a total of five products, but sales are difficult to improve. From January to October this year, the DS brand sold 2030 vehicles in China, compared with just 10 in October.

Some industry insiders said that the sharp decline in sales of the DS brand in China is mainly due to the late entry of the DS brand into the Chinese market, low brand awareness, over-reliance on PSA Group for technology, and the main reason for its continued low sales due to high prices.

The continued decline in sales has led to a long-term loss of Changan PSA, which has lost nearly $700m in the past six years, according to data.

Sales are difficult to improve, which also makes Changan Peugeot Citroen in a state of loss for a long time. Over the past six years, Changan Peugeot Citroen has lost nearly $700 million.

In 2017, Changan Automobile signed an agreement with PSA Group to increase investment in the DS brand in order to increase the production, sales and awareness of the DS brand in China, but to no avail. Instead of improving, sales of the DS brand fell sharply, and eventually the two joint ventures sold their shares.

However, PSA also said that although it intends to sell Changan PSA shares, but the DS brand does not intend to withdraw from the Chinese market, there are many possibilities for development.

Baoneng Group has not yet responded to Baoneng's acquisition of Changan PSA. In other words, Baoneng Group does not have much experience in building cars, but Quan Motor does develop after the acquisition of Quan Motors. If Baoneng further acquires Changan PSA, can it save the DS brand on the edge of the market?

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