Dongfeng PSA cuts 2010 sales target

Shanghai, August 6 (Gasgoo.com) Possibly influenced by BYD's recent move on cutting 25% of its sales target for 2010, French carmaker PSA Peugeot Citroen's joint venture with Dongfeng Motor Corp, has secretly cut its sales target for the year as well, according to sources inside PSA.

PSA Peugeot aims to sell about 400,000 cars or at least 375,000 cars (to be safe) in China this year, approaching the annual capacity of 450,000 units of its current two plants jointly built with Dongfeng Motor. While it only sold 200,000 units in the first seven months and merely 24,000 units last month.

Given the poor sales growth, it is almost impossible for Dongfeng PSA to accomplish its goal in the year. Hence, it appears a right decision for the JV to lower its sales target. The sources did not reveal the specific sales volume the company has cut.

In fact, the early data released by China Passenger Car Association (CPCA) show that among the country's top ten carmakers, about 60% of them failed to achieve their sales target for the first half of this year.

Data show that BYD achieved only 36.13% of its full-year sales target of 289,000 units, Chery Auto 45% 310,000 units and JAC 35% 105,000 units. Additionally, most of China's independent carmakers like Haima, SAIC, Great Wall, Dongfeng Motor and Lifanall all did not accomplish their goals.

It is widely believed that China's auto market will get slower in the second half of the year and some carmakers may become even more desperate to attain their full-year goals.

Industry insiders say BYD's big cut to the sales target shows its great rationality, which in part helps to ease its marketing pressure, adding that nothing needs to be hidden for the sake of development.