AutoBeta(AutoBeta.net)07/24 Report--

Dongfeng Group announced today that the combined results of Shenlong Automobile and Shenlong Automobile sales Co., Ltd. in the first half of 2019 achieved an income of about 921 million euros, a decrease of about 59.7 percent over the same period last year, and a loss of 325 million euros (about 2.489 billion yuan). A profit of 25 million euros in the same period last year.

DPCA owns two joint venture brands, Dongfeng Peugeot and Dongfeng Citroen, and the main reason for the loss is related to the sharp decline in sales. Data show that DPCA sold 10128 units in June, down 54.3 per cent from a year earlier, with cumulative sales of 63027 units from January to June, down 60 per cent from a year earlier.

It is worth noting that on the same day, the group released its first-half global results, with operating income of 38.3 billion euros and consolidated net profit of 2.048 billion euros, an increase of 335 million euros compared with the same period in 2018.

PSA Group's global performance is profitable, especially in the European market, while it is getting worse and worse in the Chinese market. "We want to stay in China and absolutely do not want to leave China," Tang Weishi, chairman of the PSA Group Management Committee, said at a media communication meeting held at the headquarters in Paris, France on July 3. "this belief is very firm." Once again, he reiterated the importance he attached to the Chinese market and planned to make changes in the speed of decision-making and marketing in order to reverse the decline in China.

At present, PSA and DPCA have made two major adjustments to the business in the Chinese market, one is to speed up the decision-making speed of the joint venture company, and the other is to strengthen brand marketing.

"any decision requires us to reach an agreement with our partners, so the Dragon's response is not fast enough. But the most important thing in the Chinese market is speed, which requires car companies to adapt at any time according to market conditions and market conditions, "Tang Weishi said." We are also considering whether to give the joint venture companies more autonomy so that they can react more quickly. "

Tang Weishi also pointed out the problems in the Chinese market: PSA failed to convey brand value, and consumers did not know the brand history of Peugeot and Citroen.

An Tiecheng, chairman of Shenlong Automobile Co., Ltd., said that the brand value of PSA needs to be exported. Since the second half of last year, PSA has re-combed the brand value and will continue to invest in promoting the brand in the future.

On the issue of product pricing, which is generally dissatisfied with Chinese consumers, DPCA said, "A suitable price is very important. There were indeed different suggestions between shareholders before, but the two sides have reached a consensus since last year."

In March, Dongfeng Peugeot announced the official launch of the new generation 508L, with a price of 15.97-225700 yuan, and launched four models of 1.6T+6AT and 1.8T+8AT power. Compared with the past, Shenlong is a lot more pragmatic in terms of product pricing, but brand decline is also another factor, leading to low sales.

DPCA aims to sell 20, 000 units of the Peugeot 508L in 2019, but by the end of June, it had sold only 2421 units in its three-and-a-half months on the market, with monthly sales as low as 393 in June.

According to the sales target of 235000 vehicles in 2019 set at the beginning of the year, there is little hope that the dragon will achieve its target. Now that China's auto market has entered the reshuffle period, there is not much time left for PSA and DPCA.

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