AutoBeta(AutoBeta.net)10/19 Report--

DPCA posted an open letter on its official WeChat account on Oct. 19, saying that DMC has encountered setbacks in its development, putting a lot of pressure on our partners, such as customers, dealers and suppliers. DPCA said that DPCA is now ready to "burn its bridges" and "fight a war on its back".

Data show that DPCA is a joint venture company jointly funded by Dongfeng Motor and PSA Group in 1992, which owns Peugeot and Citroen car brands. In terms of time, it is not too late for DPCA to enter the Chinese market, but it has now become one of the worst joint ventures.

DPCA began to go downhill after sales peaked at 704800 in 2015. DPCA has experienced a waist-chopping decline since 2016, falling from 704800 in 2015 to 113600 in 2019. DPCA's cumulative sales in the first eight months of this year were only 81045, a decline of 63.36 per cent.

Under the superimposed influence of the domestic epidemic and the car market, the operation of DPCA, which is already in low sales, has been hit again.

In the face of continued losses in sales and performance, PSA Group and Dongfeng Motor announced that they would provide 50 million euros to DPCA in the fourth quarter of this year. Dongfeng will also provide strong support for the liquidity needs of DPCA's production and operation. In addition, from 2020 to 2037, PSA Group will provide DPCA with hundreds of millions of yuan every year for the brand image construction and channel development of Dongfeng Peugeot and Dongfeng Citroen. At the same time, the two major shareholders also decided to increase the capital of DPCA in the first quarter of 2021 to ensure the future development of DPCA.

Prior to this, there are three major brands in the domestic legal brand market: Renault, Peugeot and Citroen. Since Dongfeng Renault announced its withdrawal from China's fuel passenger car market in April this year, DPCA has lost a close friend who is in the same boat.

For Citroen, sales have fallen since 2016, despite its Peugeot and Citroen brands. In September last year, DPCA launched a "yuan" recovery plan, including brand promotion, business support, financial support, management efficiency improvement and other measures to change the persistently sluggish sales and performance.

However, it has been a year since Yuan was announced and implemented, but there has been no significant improvement in the sales performance of DPCA. According to a statement issued by Dongfeng Group shares, the combined earnings of DPCA and Dongfeng Peugeot Citroen in the first half of 2020 were 386 million euros (2.999 billion yuan). It was down 58% from a year earlier; the net loss was 168 million euros (1.3 billion yuan), down 48.3% from a year earlier.

At present, the market concentration of various series of domestic passenger cars is constantly increasing, and the market share of French brands, mainly Peugeot and Citroen, has fallen to 3%. In the face of the continuous upward development of Japanese German and domestic independent brands, if DPCA does not make a change, it will not be far away from the next Dongfeng Renault successor.

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