Tensions may push Citroen sales down in China

Shanghai, December 11 (Gasgoo.com) President Nicolas Sarkozy's meeting with the Dalai Lama has infuriated China and will unavoidably strike a further blow to the Chinese business of French automaker PSA Peugeot Citroen, which is already struggling with a protracted sales slump this year, according to media reports.

Talk of "boycotting France" spreads over China's Internet lately due to the French president's erroneous act. Mr Yang, a car owner, told China Business Herald, "I'm disgusted with French brands now and will never buy any one of them in future."

A salesman at Dongfeng Citroen authorized dealership in Beijing told reporters that though with huge discounts and new models, the number of customers has dropped by more than 50% from a year earlier.

The matter came after an attack on the Olympic torch relay in Paris this April, which triggered a boycott against French retail giant Carrefour, French consumer goods, and French tourism.

Back in January, the French automaker PSA Peugeot Citroen ran a full-page advertisement in several Spanish newspapers featuring a poster of late Chinese leader Mao Zedong pulling a wry face at a Citroen hatchback. It infuriated the Chinese people and an online survey showed 67.55% of the 300,000 interviewees said they would never buy a Citroen brand car.

PSA Dongfeng Peugeot Citroen Automobile Co, a joint venture between Dongfeng Motor Corp and PSA Peugeot Citroen, has been seeing negative growth in the sales of its Citroen cars in the Chinese market this year and it is unlikely for this brand to have any sales recovery for the rest of the year.

Sales of Citroen cars were 78,000 units for the first three quarters of 2008 and only hundreds of units of C-Triomphe, Fukang, C2 and Picasso cars were sold per month, according to a report in China Business Herald.

A source who has worked at the joint venture told the newspaper that besides political reasons, the undesirable performance of the French brands is also caused by the fact that French people hold all key positions in the venture and turn a deaf ear to the demand of Chinese consumers.

In 2007, PSA Dongfeng Peugeot Citroen Auto sold 207,000 vehicles, up 2.95% year on year, including 92,200 Dongfeng Peugeot cars and 115,000 Dongfeng Citroen cars. Sales of both brands were short of their targets.