Written by / Han Ling
Edited / Mao Shiyang
Peugeot and Citroen each "fly alone"
DPCA, which was supposed to celebrate its 30th anniversary this year, is ushering in the year of "separation".
A few days ago, some media quoted informed sources as saying that this year, the two brands of Dongfeng Citroen automobile, Dongfeng Citroen and Dongfeng Peugeot, will be split, and each will become an independent company.
In terms of specific details, Dongfeng Peugeot, the two major brands of Dongfeng Peugeot, will be led and controlled by the French Side Stellantis Group, and Dongfeng Citroen will be dominated and controlled by the Chinese company Dongfeng. The parent company, DPCA, will only be responsible for manufacturing, and Dongfeng and the joint venture Stellantis Group will maintain the existing 50:50 equity ratio. For this scheme, Dongfeng internally called the "two-bedroom and one-room" model.
In this regard, DPCA officially said that "negotiations are still in progress", details such as future product planning have yet to be finalized, and more details will be announced on March 1 when Stellantis Group released its new strategic plan in China.
"The separation will help us develop a more flexible and closer to the Chinese market for Dongfeng Citroen." For the separation, an executive at Dongfeng's headquarters told Caijing Tianxia Weekly, but for the specific details of the rumors outside, he said "there is nothing to reveal."
"The business hasn't changed as much as the outside world thinks." On February 16, a person in charge of DPCA told Caijing Tianxia Weekly that in terms of brand operation, Dongfeng Peugeot and Dongfeng Citroen were originally operated separately, and the marketing, brand, and marketing departments were independent, while the parent company, DPCA, had already weakened its functions outside of production, "Now it is just separating the equity." ”
It is understood that the Stellantis Group includes 15 car brands, as well as Fiat, Alfa Romeo, Jeep, Maserati, Chrysler, Dodge, Lancia and so on. At present, the company's joint venture vehicle companies in China mainly include DPCA Automobile and GAC Fiat Chrysler, which are also in trouble.
Stellantis Group wants to increase control to save the Chinese market from decline. According to previous news, Stellantis Group will announce its strategy in China on March 1, and an important part of it is to increase its shareholding in GAC FCA and increase its shareholding ratio from 50% to 75%, which also makes the outside world speculate about the adjustment of the share ratio of Dongfeng Dragon Automobile.
It has been previously reported that the independent Dongfeng Peugeot will be controlled by the Stellantis Group, with the shareholding ratio increasing to 75%, while Dongfeng Citroen, controlled by the Chinese side, will also increase its shareholding to 75%.
In fact, no matter how the final shareholding ratio is adjusted, it seems that Dongfeng Peugeot and Dongfeng Citroen have left the "single flight" of DPCA, which has also pressed the rest of the "double brand" strategy of Dongfeng Peugeot Peugeot and Dongfeng Citroen.
From 2019 onwards, DPCA will merge its Dongfeng Peugeot and Dongfeng Citroen 4S stores to achieve the purpose of reducing costs and rapidly rolling out the network. After the split, in the future, DPCA will no longer build new dual-brand stores, and the existing dual-brand stores will be retained.
From the original dual-brand synergy strategy to their own solo flight, this is directly related to the continuous sluggish sales of Shenlong for many years. However, some insiders believe that this "two rooms and one hall" model can allow foreign parties to retain their brands in the Chinese market on the one hand, and on the other hand, they can also allow the Chinese side to achieve the greatest degree of control over their brands.
"Save" the dragon
Founded in 1992, DPCA was the third major joint venture after SAIC-Volkswagen and FAW-Volkswagen.
However, since the sales of DPCA reached a peak of 700,000 vehicles in 2015, a slippery slope has begun. From 2016 to 2020, it fell by 15.2%, 36.85%, 32.89%, 55.17% and 55.74% respectively. In 2020, the annual sales of Shenlong is only about 50,000 vehicles.
During the years of decline, the relationship between the two sides of the joint venture began to become delicate, and there was controversy over the way the company's performance was driven to recover, prolonging the decision-making process.
In June last year, a Dongfeng Citroen executive revealed to Caijing Tianxia weekly that before a new car of the brand was launched, Chinese executives wanted to reduce pricing to a minimum to ensure sales and restore control over the terminal price of 4S stores.
Previously, due to the decline in sales of the double brand for several consecutive years, the dealers of the DPCA double brand went their own way and started a price war, and the main engine factory almost lost control of the terminal price.
However, this plan was rejected by French executives, "who want to ensure the brand power of French cars and pay more attention to profits." The executive said.
It is worth noting that not long ago, DPCA motor just reported that it was selling the second factory to Dongfeng Honda, and a series of intensive actions were all for "self-help".
Dongfeng Motor Group released data showing that in January 2022, DPCA sold 13,000 vehicles, an increase of 90.2% year-on-year, which is also the fifth consecutive month since the sales of Dongfeng Motor Exceeded 10,000 in September 2021. At the end of December last year, DPCA officially took the lead in announcing the news that it had completed the annual sales target of 100,000 vehicles ahead of schedule, of which Dongfeng Citroen's annual sales increased by 137% year-on-year, and Dongfeng Peugeot's annual sales increased by 74% year-on-year, achieving positive year-on-year sales growth for 13 consecutive months.
This is good news that has been missing for a long time, but it is still too far away from a "renaissance".
Forced by the operating pressure brought about by the continuous decline in sales, DPCA had to suspend production in some factories.
At present, DPCA has a total of 4 production bases in China, of which the first, second and third factories are located in Wuhan, and the fourth factory is located in Chengdu, and the total planned annual production capacity of the four factories is more than 1 million vehicles. However, the actual capacity utilization rate is very low, and the cumulative sales of DPCA automobiles in 2021 is about 101,000 units, in other words, its capacity utilization rate is only about 10%.
In 2019, Shenlong closed the first factory in Wuhan and sold the second factory. The production capacity of the second plant is planned to be about 150,000 vehicles, and since then it has been in a "unemployed" state, which is collected and stored by the government of Wuhan Economic Development Zone. Now the second plant has been taken over by Dongfeng Honda as a new factory specializing in the production of pure electric models to solve the problem of insufficient production capacity.
All along, compared with the hot sales of Japanese and German joint venture cars in the domestic market, the presence of French cars is relatively weak. In particular, the delisting of Dongfeng Renault and the sale of Changan PSA to Baoneng Automobile are considered by the industry to be the most powerful evidence of the collapse of French cars in the Chinese market. In this context, a series of self-rescue actions of the divine dragon are also regarded as the last attempt of the French car in China.
In 2019, Shenlong released the "Yuan" revival plan, hoping to reverse the decline in sales. In terms of specific planning, we will strive to achieve a positive cash flow in 2019, with sales increasing to 250,000 vehicles in 2020-2021 and exceeding 400,000 vehicles in 2022-2025, and being stable. However, under the impact of the epidemic, the "Yuan" plan did not work, and the sales volume of Shenlong still "fell endlessly".
Earlier, PSA Group analyzed the main reasons for the decline in DPCA's sales was the way of communication and the misunderstanding of the needs of Chinese consumers, on the other hand, the company's business in China was inefficient in operation and there were problems such as slow product updates.
In order to save DPCA to the greatest extent, PSA Group has provided 50 million euros (about 400 million yuan) to Peugeot Andryu In the fourth quarter of 2020 to enhance the image and market volume of Peugeot and Citroen in China. From 2020 to 2022, PSA invested 130 million yuan per year, and 81 million yuan per year from 2023 to 2037 for the construction of dual brand image.
The PSA's bailout plan has broken the industry's previous speculation that PSA may exit the Chinese market. Zhang Zutong, chairman of DPCA Automobile Co., Ltd., said in an interview that the previous market downturn of DPCA was not strong and the DPCA product planning was not strong, "(Before) PSA has what products, we introduced it in, did not really do commodity planning, in fact, DPCA is not impossible to change." ”
It is worth noting that in the same period, the high-rise of DPCA automobiles also underwent major changes. Chen Bin, assistant to the president of Dongfeng Motor Group Co., Ltd., was appointed as the general manager and party secretary of Dongfeng Dongfeng Motor Group Co., Ltd., and PSA Group temporarily stopped appointing executive deputy general manager, which was the first time in the company's history. In addition, Ren Guang, general manager of Dongfeng Citroen, will be transferred away and replaced by senior director Mao Chuangxin.
The French side's "decentralization" of management can not only strengthen the management and decision-making efficiency of DPCA, but also fit the core of PSA Group's self-help in China, that is, how to make products more "Chinese".
Unfortunately, even with the financial support of PSA Group, DPCA has not achieved the expected goal of selling 250,000 vehicles from 2020 to 2021.
The new energy movement is slow, and the revival still relies on fuel vehicles
Zhang Xiang, an analyst in the automotive industry, said that the decline in sales of DPCA in the past few years has an important relationship with the company's inaction in the field of new energy. Due to the lack of emphasis on innovation, its brand attention and recognition have declined.
In terms of electrification transformation, compared with other joint venture car companies, the pace of Shenlong is also relatively slow. It was not until 2020 that Dongfeng Citroen launched its first plug-in hybrid model, Tianyi PHEV, and Dongfeng Peugeot launched three new energy models: e2008, 4008 PHEV 4WD and 508L PHEV.
Judging from the sales performance of the three new energy vehicles launched by Dongfeng Peugeot in the past six months, the monthly sales of most products are only double digits, and the Sales volume of Dongfeng Peugeot e2008 in May is only more than 30 vehicles in two months, and the contribution to the overall sales of Dongfeng Peugeot Automobile is almost negligible.
Peugeot Citroen Automobile is also aware of the slow development of new energy, and at the Shanghai Auto Show last year, DPCA announced that it would take "full electrification by 2025" as an important goal for its next development. Based on this, Dongfeng Peugeot announced that all its models will launch fuel and new energy models by 2023. DPCA is full of determination in its new energy strategy, but it does not have its own core research and development advantages in electrification technology reserves, batteries and autonomous driving technology.
In a short period of time, its electrification strategy is difficult to directly provide obvious help to the overall sales of Shenlong. This means that for a long time, DPCA still relies on its fuel vehicles as the main sales.
In fact, DPCA was able to meet its sales target last year and sold more than 13,000 units in January this year, which is related to a series of new fuel vehicle products launched last year.
Among them, in September last year, Dongfeng Citroen Versailles C5 X was listed, delivering 12,000 vehicles in three months, surpassing Dongfeng Citroen Tianyi C5 AIRCROSS. The hot sales of the Versailles C5 X have also increased the overall share of French cars in the domestic passenger car market from 0.3% in 2020 to 0.6% in 2021.
At this stage, the sales of DPCA are continuing to rise, but to return to the peak of 700,000 vehicles, for the 30-year-old car company, there is no hope.