Changan PSA officially begins operation

Gasgoo.com (Shanghai November 22) - The long-awaited Changan PSA joint venture has officially opened its doors for business, the Chongqing Economic Times reported today. The JV marked the event by holding an opening ceremony in Shenzhen's Bao'an District. PSA will be investing 8.4 billion yuan ($1.35b) in the venture, whose first model will be a Citroën DS3 subcompact. PSA, now with the support of two joint ventures in China, should see its power in the Chinese market grow substantially.

Changan and PSA spent nearly two years on negotiations and preparation procedures for the joint venture. The venture is the first of its kind to have already established a joint research and development program so early in its lifespan. It is also among the first to jointly establish production sites overseas. Changan PSA has also made use of favorable policies to further strengthen its development.

Changan PSA plans to develop, manufacture and sell both commercial and passenger vehicles, as well as new energy cars, in China. The DS3 (pictured), which will be shown at the Guangzhou International Motor Show, will be its first offering. Other PSA and Changan models will be added to its lineup in the future.

Despite having entered the Chinese market relatively early, PSA's performance in China has been far from ideal. Dongfeng PSA's yearly sales have not yet exceeded 500,000 units, a very poor result when compared with VW and GM's joint ventures who easily manage to sell a million vehicles a year. A lot of this is due to PSA's relatively conservative approach to the Chinese market in terms of financial and technological investments. PSA is looking to change its past trends with the new joint venture with Changan.