Chinese dont buy French cars? Peugeot Citroen Group ushered in a dark moment

 Chinese dont buy French cars? Peugeot Citroen Group ushered in a dark moment

Market share has fallen below 1%. For legal cars, the bitter winter is far from gone.

According to the data of the China Auto Association, the proportion of legal cars further decreased to 0.63% in May, the lowest in 10 years. That is to say, in China, only six out of every 1,000 cars sold are legal cars. As one of the representatives of legal system vehicles, Peugeot Citroen Group (hereinafter referred to as PSA) in Chinas development trend has also become the focus of public attention.

Lets go straight to the subject without saying much. At PSA headquarters in France, this is the first sentence of Tang Weishi, chairman of PSA Management Committee, after meeting the Chinese media. In French business circles, Tang Weishi is famous for his decisive and forthright character, which he now brings into PSAs various decision-making.

It is undeniable that the current situation of PSA in China is not optimistic enough. When asked about the PSAs current predicament in the Chinese market, Tang Weishi, who had always been direct, remained silent for a moment. In 2010, Philip Walland, then president of PSA, set an ambitious goal for PSA: by 2020, PSAs market share in China will reach 8%. In terms of the size of the Chinese market today, an 8% market share means nearly 225,000 sales. However, the PSA sold only 262,000 vehicles in the Chinese market last year, close to one tenth of that target.

But PSA is confident that we will stay in the Chinese market and never leave the Chinese market. At present, Shenlong has made a series of adjustments, lets see at the end of this year. Tang Weishi told Nbdnews that PSA has a clear vision in China and the immediate goal is to quickly reverse losses. Although there are still many problems to be solved, the leader who used the three axes to revive PSA in Europe in two years has confidence in the Chinese market.

Do not give up 100% support for Shenlong Automobile in China Market

At present, from PSA to Shenlong, they are sending a unified and key signal: the Chinese market is very important.

There is no doubt that China has become the worlds largest automobile market, where all auto companies are accelerating their distribution. However, PSA, with its vast European market, is facing unprecedented difficulties in the Chinese market. Data show that in 2018, PSA sales in the global market were about 3.88 million vehicles, up 6.8% year-on-year. In the same period, the annual sales in China market were about 262,000 vehicles, down 32% from the previous year, accounting for only 6.7% of PSA Groups global sales.

In the past few years, we have focused most of our efforts on achieving sales growth, failed to deliver the brand value of PSA, and neglected the user potential brought by brand value. In the face of the crisis in the Chinese market, Tang Weishi did not evade, and quite frankly, PSA still attaches great importance to the Chinese market, and will never leave.

This is the second time that Tang Weishi emphasized to the Chinese media after this years Shanghai auto show that PSA will not give up the Chinese market.

In Tang Weishis opinion, PSA needs to do four things well if it wants to increase its output to the Chinese market:

1. Give the Chinese team a high degree of autonomy and improve the efficiency of decision-making;

2. Keep up with the changes in the Chinese market and introduce products that meet the needs of Chinese consumers.

3. Transfer brand value and support brand premium ability;

Source: Every reporter Zhang Jian

At the beginning of this year, the top management of Shenlong Automobile completed the change of defense and formed a new team with Antiecheng as the chairman, Gao Kailin as the vice-chairman, Rothberg as the general manager and Li Jun as the executive vice-president. At the same time, PSAs three major brands Peugeot, Citroen and DS are actively adjusting their strategies in China and making many changes.

At the product level, Dongfeng Citroen Tianyi C5AIRCROSS, C3-XR, Dongfeng Peugeot 508L and a series of products have been put into the Chinese market. In terms of products, services and customer experience, Citroen is more focused on the Chinese market than ever before. According to Lin Jiesheng, global CEO of Citroen Brand, meeting the expectations of Chinese customers is a very important part of Citroens global strategy. Citroen strives to achieve different products and services for Chinese consumers.

Its no use shouting slogans. How can Shenlong break the game?

Although PSA and Shenlong are striving to change, the market terminal sales data are still not optimistic. According to public data, from January to May this year, the total sales of Shenlong automobiles were about 53,000, down 61% from the same period last year. This figure accounts for only 17% of the performance of Shenlong in the same period of 2015. At that time, the sales of Shenlong cars were about 384,400. In 2015, it was the highlight moment of Shenlong Automobile, with sales exceeding 700,000 vehicles in the whole year, but since then, Shenlong Automobile has opened the speed-down mode and never returned to its peak.

It is noteworthy that the starting point of Shenlong is not low. In the 1990s, PSA and Volkswagen entered the Chinese market almost at the same time. They have similar starting points, but different experiences. After experiencing a 28% year-on-year growth in 2014, Shenlong began to decline. In 2018, the total sales of Chinas automobile market reached 28,081,000 vehicles, and the percentage of Shenlong automobile market dropped from 3.3% in 2015 to 1.09%. Meanwhile, Volkswagens share of the Chinese market is about 14.2%.

The huge contrast between PSA and Volkswagen in the Chinese market also makes PSA have a profound reflection. According to Gao Kailin, there are three reasons for Shenlongs stall in the Chinese market:

Second, the demand and expectation of Chinese consumers are constantly changing, while PSA has not kept pace with consumers in terms of brand and products.

Third, there are problems in the distribution network of Shenlong.

We did have difficulties in the past two years, but how to do a good job in the next two years can not be achieved by shouting slogans. Antiel Chengxiang Daily Economic News (nbdnews) reporter said that Dongfeng is willing to support PSA, and PSA to do a good job together, and PSA in the development of the Chinese market is full of determination and confidence.

Source: Every reporter Zhang Jian

Earlier this year, Shenlong announced its sales target of 235,000 vehicles in 2019, which is half of its sales target of 476,000 vehicles in 2018. Antiechengs explanation is that if Shenlong wants to return to the track, it must first be pragmatic. We have formulated a three-year plan of action, including the establishment of efficient organizations, the adjustment and timely introduction of new products, the reduction of costs, the improvement of product quality and so on.

Up to now, the new management team of Shenlong Automobile has been playing an effective role. According to the plan, the next direction of Shenlong Auto is product launch, channel construction of suppliers and distributors, and brand value transmission.

On the construction of network channels, Antiecheng disclosed that Shenlong Automobile has done a lot of work on dealers in financing, training and counseling, and also adjusted the evaluation policy of dealers to meet the development needs of the automobile industry at present.

Specifically, first of all, Shenlong Automobile redesigned its sales strategy to increase its attraction to dealers; secondly, on the basis of some dual-brand outlets already laid out, it further promoted the channel mode of dual-brand synergy to improve the coverage of sales channels, reduce costs and improve customer satisfaction; finally, it provided Distributor training, so as to promote dealers to better understand the brand, understand new models and new products, and communicate to consumers.

We have seen the trend of the dragon to be better. From todays starting point, we are more confident that the dragon will return to the track. Antiecheng said.

In addition to speeding up the pace of returning to the track in the Chinese market, facing the impact of the new four modernizations wave in the automotive industry, the electrification offensive of PSA was officially launched in 2019.

Reporters learned that from 2019, all new models launched by PSA Group will have hybrid and pure electric versions. By early 2021, PSA will launch 15 electrified models, including 8 PHEV models and 7 EV models, including Peugeot 3008, Peugeot 508, Citroen C5AIRCROSS and DS3CROSSBACKE-Tense. By 2025, the PSA will be 100% electrified.

In the field of new energy, PSA Group will adhere to the multi-energy platform strategy, that is, CMP and EMP2 are two platforms. The former can be used to produce pure electric vehicles, while the latter can be used to produce hybrid electric vehicles. We try our best to use the same technology and components on the same platform, so that multiple models can be co-produced, so that consumers have more power system options when choosing a new car, which can also significantly reduce costs. Alexandre Guignard, head of PSAs low-emission vehicle strategy department, told Daily Economic News (nbdnews).

According to the core model strategy of PSA, every brand under PSA should be guaranteed to launch a new car every year in every region. By 2023, the core model will be 100% electrified. Up to now, PSAs hybrid and pure electric vehicles have been profitable. Alexandre Guignard said that PSA Groups goal is to continue to reduce costs and further increase profits, so that the profitability of PSA and diesel locomotives will converge as soon as possible.

In Chinas new energy automobile market, PSA is also accelerating the layout. There will be electric versions of Shenlongs new products in the future, and they will play different roles in the market. Antiecheng said.

In addition to electrification, PSA also has many new actions in the field of automatic driving. At present, PSA is preparing the L3 level automatic driving system, which will be implemented in 2024. PSA Group in the research and development of automatic driving must first ensure safety, a level of technology mature before the next step. PSA Chief Technology Officer Carla Gossing said that considering cost and economy, L4 and L5 levels of automatic driving will only be deployed on shared travel modes, such as FREE2MOVE (easy to enjoy) and other shared platforms.

Faced with the new business opportunities brought by the new four modernizations, PSA does not want to make the same mistakes in the Chinese market.

Source: Daily Economic News Author: Pei Jianru Responsible Editor: Wang Xiaowu_NF