PSA optimizes China development strategy

PSA Peugeot Citroen, a French automobile and motorcycle manufacturer, lately unveiled the three-volume C-Quatre in China, indicating a great breakthrough in its reform strategy locally.
 
Priced at 108,800 yuan ($15,930) to 157,800 yuan, the new car model is designed to rival the Buick Excelle and the Elantra HDC launched by Beijing Hyundai Motor Company. This time, the world-known automaker aims to build up its presence in the high-end middle-class vehicle sector, said insiders.

Automobile markets in both the US and Europe have been on the downward path since the second half of 2008, while China has grown into the world's biggest vehicle consumer, replacing the US.

Presently, a batch of global automobile tycoons like Nissan Motor Co., Ltd., Honda Motor, General Motors (GM), and Volkswagen have all shifted their focuses onto the Chinese market, and there is on exception for PSA Peugeot Citroen.

The company that makes a gloomy performance in overseas markets raised the curtain on its China development strategy covering products, services, and layout, along with the debut of its New Elysee. This move is expected to help PSA Peugeot Citroen achieve more sales.

Approaching 20,000 New Elysee cars were sold from January to March 2009, with a 79% soar year over year, said people with the direct knowledge of the matter.

In addition, its latest product, the three-volume C-Quatre, will contribute more to the company's brand cognition upgrade and sharpness of the competitive edge.

The carmaker aggregately sold 6,162 two-volume C-Quatre vehicles in the first quarter of 2009, ranking the third place in the domestic segment market, said the vice general manger for Dongfeng Peugeot Citroen Automobile Co., Ltd. (DPCA), adding that total sales of the two- and three-volume C-Quatre will be targeted for 10,000 per month.

In recent years, PSA Peugeot Citroen had to be confronted with two problems: one is the bad service of its distributors, and the other is the shortage of charming products. Moreover, the company was heavily stricken by the world's financial crisis last year.

Total sales of the French automaker slipped 4.9% from a year earlier to 3.26 million in the entire 2008, and it witnessed a 7.2% decrease in the Citroen-branded vehicle sales. So PSA Peugeot Citroen aggregately lost EUR 343 million, compared with a EUR 885 million profit in 2007.

In the first three months of 2009, the company was still on the downward path, and its total sales and revenue from the automobile business sagged 7.3% and 23% from the prior year, respectively.