Dongfeng-PSA joint venture to launch 14 new models in next five year to resurrect itself

Shanghai (Gasgoo)- Dongfeng Peugeot Citroen Automobile Co.,Ltd (DPCA), a joint venture between Dongfeng Motor Corporation and Group PSA, plans to roll out 14 new models that meet Chinese consumers' demands in the following five years, according to the “YUAN +” strategic plan the company launched on October 24.

Chen Bin, the general manager of DPCA, said the “YUAN +” plan will not only focus on solving the problems that currently retard DPCA’s development, but also is a long-term plan for a clear future direction.

Photo credit: DPCA

The new models to be launched will feature improved facilities with better performance to offer greater driving experience. While making all existing engines complying with China Ⅵ-b emission standards, the joint venture will start the R&D of MHEVs (mild hybrid electric vehicles) and the vehicles fitting the China Ⅶ standards, and roll out the more affordable powertrain assemblies with lower fuel consumption.

Under the “YUAN +” plan, DPCA aims to hammer out marketing strategic with greater precision, afford consumers with more reliable after-sale services and improve the company's operational efficiency.

The plan is regarded by industry insiders as a self-rescue measure for DPCA as the joint venture saw its annual sales plunge to 113,600 units in 2019 from over 700,000 units in 2015.

In September 2019, DPCA revealed its “YUAN” strategic plan, aiming at increasing the annual sales volume to 400,000 vehicles and turning its cash flow positive.

Nonetheless, the “YUAN” plan was being ill implemented due to the coronavirus pandemic. For the first eight months, the joint venture’s auto sales plummeted 65.5% from a year earlier to 32,038 units. It also suffered a net loss of up to €168 million (roughly 1.3 billion yuan), a year-on-year slump of 48.3%.

To revive the money-losing joint venture, Group PSA has decided to pump €50 million in DPCA in this year's fourth quarter, and state-owned Dongfeng Motor will also chip in financial support to supplement the work capital for DPCA's production and operation. Two parent companies also determined to boost the JV's capital and shares in the first quarter of next year.