AutoBeta(AutoBeta.net)02/18 Report--

Dongfeng Automobile Group released the sales figures of four major joint ventures in January. Dongfeng Nissan and Dongfeng Honda, two Japanese companies, performed normally, but Dongfeng Renault and Shenlong Motor, two legal enterprises, were dismal. In addition, the continuing impact of novel coronavirus's pneumonia epidemic in Wuhan, Hubei Province, its future market prospects are still very confused.

According to the data released, Dongfeng Nissan sold 90, 000 vehicles in January, down 9 per cent from a year earlier. Under the influence of the epidemic, Dongfeng Nissan factories in Guangzhou have resumed production, while the factories in Dalian will resume production after the 21st and the factories in Xiangyang and Zhengzhou will resume work after the 24th.

Dongfeng Honda sold 67510 vehicles in January, up 2% from a year earlier, a company that keeps growing amid a decline in the overall car market. Dongfeng Honda's three vehicle factories are all located in Wuhan, and the resumption date of their factories has been postponed again from the original 17th to the 24th. It means that Dongfeng Honda can hardly produce cars normally in February, which will inevitably cause a serious blow to sales.

Two Japanese joint ventures account for 82% of Dongfeng Motor Group's passenger car sales, while the other two French joint ventures account for only 2.2%, with a combined sales of only 4280 vehicles.

Dongfeng Renault produced 0 in January, with sales of only 586 vehicles, down 81% from a year earlier. In fact, Dongfeng Renault's sales fell 63% in 2019 to 18607 vehicles, aggravating the decline in 2020.

Dongfeng Renault was established at the end of 2013, and the factory in Wuhan Economic and technological Development Zone was officially put into production in the first half of 2016, followed by the launch of two domestic SUV products, Correa and Coreao. In 2019, the launch of the mini SUV and the Enos of the electric car has not significantly boosted the sales of the brand.

Due to continued losses, foreign media reported that Renault Group interim CEO Delbos said that Renault would evaluate its assets in its joint venture in China and explore plant closures to control costs.

It means that Renault is likely to be delisted, but the news has since been denied. A spokesman for Renault Group replied, "Renault Group has long-term development goals in China, and we attach great importance to the relationship with Chinese partners and the strategic market of China."

Renault, whose brand strength, product strength and publicity are all at a disadvantage, its development in China will become more and more difficult.

DPCA, another French company, also performed poorly, selling 3694 vehicles in January, down 70 per cent from a year earlier. Dongfeng Peugeot and Dongfeng Citroen still failed to get rid of the market downturn. In 2019, DPCA fell by 55%, with annual sales of only 113579 vehicles.

"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. Even though the company has made great efforts to change the adverse situation, the sales situation has not improved significantly.

During the outbreak, DPCA, which is based in Wuhan, postponed the resumption of work at the factory again. The company announced that the official resumption time of the Wuhan factory will be after the 21st, and the specific time will be determined separately according to the changes in the epidemic situation and the relevant requirements of the government.

Even if the situation is not objective, DPCA has formulated a "yuan" plan to seek a renaissance in the Chinese market. According to the meta-plan, the annual break-even point of the Dragon from 2020 to 2021 will be reduced to 150000; in 2020, the Dragon will launch a new generation of 2008 models and launch four new energy products at the same time. DPCA also promised to make a more in-depth study of Chinese customer perception, continuously improve Chinese design and quality reference system, and make product prices more pragmatic and sincere.

It is very difficult for DPCA and Dongfeng Renault to get out of the loss quagmire in a short time, and the continuing impact of the epidemic has undoubtedly made things worse for the company. The industry is worried that "long-term accumulation is not easy to solve" may lead to the possibility of brand withdrawal. However, the PSA Group has made it clear many times that it will never leave China, and this belief is very firm.

As the cold winter of the car market continues and the Chinese market enters the stock competition, the knockout stage of the automobile industry has begun, and it is time for French car companies to consider how to survive in this market.

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