The road to redemption of the Dragon Car is once again facing variables.
A few days ago, a relevant person from DPCA revealed that due to the extreme uncertainty of this year and the consideration of the economic situation, industry competition and other factors, the Chinese and French shareholders will suspend the "two rooms and one hall" joint venture strategic adjustment plan that was previously rumored in the industry. According to the source, "At present, both Chinese and French shareholders hope to do a good job in sales and word of mouth together, and then talk about the 'two rooms and one hall' plan later."
The strategic adjustment plan known as "two rooms and one hall" was proposed in February this year, specifically to retain DPCA as a production base and maintain the existing share ratio; at the same time, its two major brands Peugeot and Citroën are dominated by French shareholders and Chinese shareholders respectively. Under the premise of giving full play to their respective advantages and characteristics, the shareholders of both sides share public resources and fields, including manufacturing.
For this strategy of DPCA, industry analysis believes that the shareholders intend to break the previous "consistency" of the two brands, aiming to improve internal competition and enhance brand vitality.
Increased internal competition is considered to be somewhat beneficial to future development. Cui Dongshu, secretary general of the Association, once said: "The two brands of Peugeot and Citroen, which are controlled by China and France respectively, should be a good thing." I think that concerted action is not a very good thing, especially in the Chinese market, we can see the great achievements of 'North and South Volkswagen', Dongben and Hiromoto, Yifeng and Guangfeng, etc., which proves that internal competition is a very meaningful thing. ”
In the context of the long-term decline of French cars, DPCA Motors, as a Sino-French joint venture, has also experienced years of turbulence.
In order to save sales that fell to the bottom, DPCA released the "Yuan" revival plan and the "Yuan +" plan in 2019, including the "dual brand store" strategy, that is, the merger of Dongfeng Peugeot and Dongfeng Citroen's 4S stores, and the two brands sold in the same 4S store. The original intention of expanding the brand's sales channels was good, but this strategy also brought drawbacks such as uneven competition between Peugeot and Citroën. The initial reform effect is not ideal, in 2020, the annual sales of DPCA was only 50,200 units, a record low.
However, under the active self-help measures such as the introduction of new products, DPCA has also achieved certain results. With the help of the new sales pillar model Versailles C5 X, DPCA has seen a rebound in sales in 2021, with a cumulative wholesale volume of more than 100,000 units throughout the year. Despite this, there are still concerns about DPCA, after all, there are risks in relying on the sales growth of a single model.
In February this year, DPCA resold its long-idle second plant to Dongfeng Honda, which said it would transform the plant into the brand's first new energy benchmark factory in the world.
This change has further increased the criticism of the slow electrification process of DPCA.
As an important carrier of The Stellantis Group's business layout in the Chinese market, DPCA has not been delegated tasks in the latest electrification strategy of its French shareholders. In March this year, Stellantis Group released the "2030 Electrification Strategy", a major shift to electrification, and for how to carry out electrification transformation in the Chinese market, the multinational car company did not elaborate, only said that for the Chinese market, Stellantis Group said it will plan an asset-light business model to reduce fixed costs.
A month later, Dongfeng Group announced that it had purchased the remaining 75% stake in Dongfeng Peugeot Citroen Financial Co., Ltd. for 3.718 billion yuan, after which Stellantis Group's strategy of "planning an asset-light business model in the Chinese market" was further implemented.
In the eyes of the outside world, the layout of Stellantis inevitably has a sense of not focusing on the Chinese market, perhaps the decline of DPCA for many years is really unconfident, but no matter which shareholders in China and France, they have not yet given up the redemption of DPCA.
However, for the current DPCA, it is clear that new measures are needed to save sales. Regardless of whether the "two-bedroom, one-room" plan is really suspended, this redemption seems to be somewhat insufficient.