AutoBeta(AutoBeta.net)08/12 Report--

A few days ago, due to the decline in performance, DPCA has lost money in the Chinese market for years, and the news that it hopes to reduce losses and improve cash flow through factory closures and layoffs has finally been confirmed. According to China Business report, DPCA will begin to implement measures such as work stoppage and personnel diversion as soon as this week, and plans to relocate the Wuhan No. 1 plant to Wuhan No. 3 plant, where the former Wuhan No. 1 plant will be converted into commercial land.

Previous internal documents showed that DPCA currently employs about 8000 people, and the company plans to reduce it to 5500 by the end of the year and 4000 by 2022.

However, according to the person in charge of DPCA, DPCA has no plans to lay off employees. During the shutdown period, DPCA will pay living expenses to laid-off employees in accordance with the requirements of relevant national laws and regulations, and pay social insurance on time and in full, accumulate the length of service, and enjoy the relevant benefits prescribed by law.

With regard to the current layoff and personnel diversion plan, DPCA is actively expanding various channels to properly divert surplus personnel. specific measures include carrying out labor coordination within the parent company Dongfeng Company, supporting other companies within the group, and organizing the cross-regional deployment of employees to the company's off-site factories.

In addition, DPCA Wuhan Factory 1 (Wuhan No.1 Plant) plans to move to Wuhan No. 3 Plant as a whole. Wuhan No. 1 Factory is collected and stored by the government, and the nature of the land has been changed into commercial land. The resulting commercial income is distributed between the government and DPCA at 50:50, and the supplementary cash flow is expected to be 4.9 billion yuan.

In the face of the decline in the Chinese market, PSA Group said that it is working with partners to improve the current situation and reduce the break-even point of the joint venture. At present, factory closures and layoffs are effective ways to reduce costs.

French PSA Group is one of the first foreign car companies to enter China and established a joint venture with Dongfeng Company in May 1992. In 2013 and 2014, DPCA entered into rapid development. DPCA sold 704000 cars in 2014, of which Dongfeng Citroen and Dongfeng Peugeot sold about 320000 and 380000 respectively. While far exceeding the target of 650000 vehicles at the beginning of the year, it also announced the birth of a new historical record.

At the same time, based on its own development needs and the good expectations of the development of China's automobile market, an ambitious development plan stands out, targeting an operating target of 800000 vehicles in 2015 and a planned production and sale of 1 million vehicles in 2017.

However, since 2016, Dongfeng Peugeot and Dongfeng Citroen have gone downhill at the same time, with sales plummeting and brands moving from mainstream to marginal. By 2018, DPCA has sold only 250000 cars.

The sharp decline in sales led to a loss in the company's performance in 2018. In 2018, DPCA's sales revenue was 3.652 billion euros (about 27.8 billion yuan), down 32.42% from the same period last year; the loss during the period was 468 million euros (about 3.56 billion yuan), and the loss increased by 680% compared with the same period last year. As of the first half of this year, DPCA has lost 6 billion yuan in a year and a half.

In order to quickly reverse the weak channel caused by the withdrawal of dealers, Citroen also plans to launch a dual-brand 4S store of Dongfeng Citroen and Dongfeng Peugeot, that is, a 4S store that can sell dual-brand models at the same time. Dual-brand stores can greatly reduce the investment threshold and operating costs of dealers, and improve revenue.

DPCA originally had about 1000 4S stores, but due to the decline in sales year by year, the number of 4S stores has decreased to about 700. less than 40% of them are in normal operation. "double-brand store" is one of the important measures to activate the channel ability of DPCA.

Carlos Tavares, chairman of the PSA Group Management Committee, said in an interview with Chinese media at the French headquarters, "China is the best and largest market in the world, and PSA will not give up the Chinese market. We need to adapt to the speed of the Chinese market."

In early May 2019, Shenlong Automobile Company has also obtained the access of national new energy vehicle manufacturers and the production of PHEV models (plug-in hybrid models), and four new energy models will be launched intensively in China in the future.

As we all know, Dongfeng Motor Group and PSA Group have not made efforts in one or two days, and the sales decline has not been improved for such a long time.

Open source is not good, so we can only intercept the stream. However, in the face of increasing uncertainties such as the market downturn and economic downturn, it is not easy for DPCA to find a receiver.

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