AutoBeta(AutoBeta.net)05/18 Report--

On May 18, DPCA celebrated its 30th birthday. Data show that Shenlong Automobile Co., Ltd. was established on May 18, 1992, jointly funded by Dongfeng Motor and Peugeot Citroen Group, headquartered in Wuhan, Hubei Province. From the point of view of time, it is not too late for DPCA to be established. This year happens to be the 30th anniversary of the founding of DMC, which is the critical moment to determine its fate.

As the first joint venture to enter the Chinese market, DPCA has mass-produced household-known models such as Fukang, and has reached an annual sales peak of 700000 vehicles, making it a popular car brand. However, at the same time when DPCA entered the highlight moment, the problems of product quality, technology iteration, business philosophy and even corruption were immediately exposed, coupled with the slow iteration of product updates and other reasons, DPCA gradually faded out of the market. Data show that DPCA has continued to decline since it reached a peak of 704800 vehicles in 2016, falling by 15.2%, 36.85%, 32.89%, 55.17% and 55.74% respectively from 2015 to 2020, halving sales for two consecutive years.

In addition to product problems, its internal management is also faced with challenges. According to public reports, at least four former executives of DPCA are under investigation in 2021 on suspicion of serious job violations. On April 9, 2021, Zhang Yuguang, former head of Dongfeng Citroen Brand Marketing Department, was subject to supervision and investigation on suspicion of serious job violations; on May 20, 2021, Yang Ning, former vice minister of Dongfeng Citroen Brand Marketing Department, was subject to supervision and investigation on suspicion of serious job violations. On June 4, 2021, Dong Anyin, former vice minister of marketing department of Dongfeng Peugeot Brand Department, was under supervision and investigation on suspicion of serious job violations. On August 13, 2021, Sun Yiwen, former head of the marketing department of Dongfeng Citroen Brand Department, was under supervision and investigation on suspicion of serious violations.

After the trough of DPCA, China and France also tried to turn things around. In September 2019, DPCA launched a "yuan" plan to change its persistently sluggish sales and performance, but DPCA in Wuhan was disrupted by the epidemic and did not stop its decline in the first half of 2020. In September 2020, Shenlong Automobile Co., Ltd. ushered in a personnel adjustment. Chen Bin, deputy general manager of Shenlong Automobile Co., Ltd., who had been in office for only 16 days, became the general manager of DPCA. Rothbo will no longer serve as the general manager of Dragon Automobile Co., Ltd. After Chen Bin took office, he did not shy away from the problems of DPCA at that time, and even said bluntly that "DPCA had already moved into 'ICU'" in 2020. Chen Bin said that in the future development strategy, Shenlong will stop expanding its sales network. "instead of blindly developing the network, we will focus on moving forward with these 350 partners."

In October 2020, DPCA released the "Yuan +" plan, which began to revive with the slogan "products are more Chinese, marketing is more accurate, service is more reliable, and operation is more efficient". Data show that DPCA sold a total of 100567 vehicles in 2021, an increase of 100.07% over the same period last year. However, although sales have doubled compared with 2020, the recovery has not been successful and the road is long.

At its peak, DPCA had a planned capacity of one million, but at present, the annual sales of only 100000 vehicles are very different, and the capacity utilization is seriously insufficient, so it is imperative to deal with excess capacity. It is understood that DPCA will sell a factory in 2019, and a few days ago, according to domestic media reports, DPCA II plant has been officially taken over by Dongfeng Honda and will be transformed into a pure electric car factory. Both sides confirmed the news. At present, DPCA has only two production bases, the third factory in Wuhan and the fourth factory in Chengdu.

As a joint venture brand, the launch of DPCA is mainly limited by French new car technology, so how to control the rhythm and localization of product renewal is also a difficult problem. To this end, the Dragon car "two rooms and one hall" plan was exposed at the beginning of the year. The so-called "two rooms" means that Dongfeng Peugeot will be dominated by France and Dongfeng Citroen will be dominated by the Chinese side; "one hall" refers to the sharing of existing public areas such as commodity planning, technology, quality, industrial production, and so on. In addition, according to China Finance and Economics, the two sides have set up a working group to negotiate the equity adjustment of DPCA, with a 75 per cent stake in Dongfeng Peugeot and a 75 per cent stake in Chinese controlling shareholder Citroen. The stake in DPCA will remain unchanged at 50:50. However, according to media reports, DPCA's "two rooms and one hall" plan has been suspended, taking into account the economic situation, industry competition and other factors, the two shareholders plan to "work together into a rope" to do the sales.

Citroen has two major brands, Peugeot and Citroen, but Versailles is the only one that does well. According to the plan, in addition to the Dragon Fukang Pure Electric already launched, Citroen and Peugeot will also launch Tianyi revamped models, Peugeot T93RR localized models and P54 global models in 2022. DPCA says 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.

For Dragon Motor, the year 2022 is destined to be an extraordinary year, but in the context of independent brands rising, new energy vehicles becoming a development trend, Renault delisting and DS malaise, it is unknown how DPCA, as the representative of legal brands, should recover the situation, but the fact is that the glory of Shenlong Automobile has passed, and the competition in the future will be more fierce.

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