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Dongfeng Motor Group Co., Ltd. (hereinafter referred to as "Dongfeng Automobile Group") announced that it had entered into an equity transfer agreement with PFN and Citroen Automobile Co., Ltd. Under the equity transfer agreement, the company agreed to acquire, and PFN and Citroen agreed to transfer 25% and 50% of Dongfeng Peugeot Citroen Auto Finance Co., Ltd., respectively. At present, Dongfeng Automobile Group, PFN and Citroen hold 25%, 25% and 50% stake in Dongfeng Peugeot Citroen Auto Finance Co., Ltd., respectively. Upon completion of the equity transfer, Dongfeng Motor Group will acquire a 75% stake in Dongfeng Peugeot Citroen, which will become a direct wholly-owned subsidiary of the company. Dongfeng Motor Group said it agreed that the deal was expected to be completed in the second half of 2022 subject to the approval of relevant antitrust authorities and banking and financial regulators.

According to the announcement, Dongfeng Peugeot Citroen Finance is mainly engaged in providing car loans to dealers and providing car consumer credit and other related business to individual and commercial customers. On the date of signing of the equity transfer agreement, Dongfeng Peugeot Citroen has a registered capital of RMB 1 billion and has been fully contributed by shareholders according to their respective shareholding proportions.

According to previous reports, Stellantis Group will adjust its business in China, and DPCA will adopt the plan of "two rooms and one hall", in which "two rooms" means that Dongfeng Peugeot will be dominated by France and Dongfeng Citroen will be dominated by China. "one hall" refers to the sharing of existing public areas such as commodity planning, technology, quality and industrial production. According to related reports, Stellantis Group and Dongfeng Motor began negotiations on equity adjustment of DFMC, with a foreign holding of 75 per cent of Dongfeng Peugeot and a 75 per cent stake in Chinese controlling shareholder Citroen, with the shares held by both parties unchanged at 50:50. However, as of press time, DPCA's plan for "two rooms and one hall" has not been announced, but Dongfeng Motor Group's acquisition of Dongfeng Peugeot Citroen Financial Co., Ltd., does not rule out the possibility that it is part of the plan.

According to production and sales data released by Dongfeng Motor Group, DPCA sold 10847 vehicles in March, up 44.51 per cent from 7506 in the same period in 2021. Cumulative sales in the first quarter were 31480, up 79.49 per cent from 17539 in the same period in 2021. The highest-selling model in March was the Versailles C5X, with 4700 vehicles, followed by Peugeot 4008 and Peugeot 2008, with sales of 1294 and 1264, respectively, while other models sold less than 1,000 vehicles, according to the Federation of passengers. At present, the source of sales of DPCA basically depends on Versailles C5X, which is the best-selling model of DPCA, but there is a little gap between the same level of products.

The year 2022 marks the 30th anniversary of the founding of Dragon Motor, and it is also a critical moment to determine its fate. Looking back at the history of DPCA, we can see that there was a well-known model like Fukang, which once sold 700000 cars a year, which is a real first-tier car brand. However, due to the aging product line and untimely upgrading, DPCA fell by 15.2%, 36.85%, 32.89%, 55.17% and 55.74% respectively from 2016 to 2020, with sales declining for five consecutive years compared with the same period last year, while sales halved for two consecutive years.

In October 2020, DPCA released the "Yuan +" plan, which started the road of revival with the slogan of "products are more Chinese, marketing is more accurate, service is more reliable, and operation is more efficient." at present, it has achieved preliminary results, but it is still a long way from its goal. For the new year's planning, DPCA said that it will reach 170000 and challenge 200000 in 2022. After reaching 200000 vehicles, we must be stable after making a profit. In the future, we will not pursue 500000 or 700000 vehicles, but will stabilize at 300, 000 or 400, 000 vehicles, develop with high quality, and keep up with the commodities behind. From the perspective of the future, the revival of DPCA still depends on products, and according to the "Yuan +" plan, DPCA will build and launch 14 new models within 5 years to achieve a comprehensive upgrade of the product matrix.

DPCA insiders said that although DPCA sold more than 100000 vehicles in 2021, it still did not turn a profit. It can be said that at present, the Dragon car is still hovering on the line of life and death, and it needs to reach at least 200000 before it can catch its breath. According to the data, DPCA sold a total of 31480 vehicles in the first quarter, achieving the sales target of 170000 vehicles. For DPCA, it may be full of confidence to achieve its sales target of 170000 vehicles, but how to remain competitive in the market after that is still a question that DPCA and its shareholders need to ponder.

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