China and the (late) PSA group is an old story. In 1992, Citroën became the second car manufacturer in the world to produce in the Middle Kingdom., then in its infancy in the automotive industry. Nine years after the Volkswagen Santana, The Citroën Fukang, a ZX adapted to the local market, rolls off the assembly lines of the Wuhan factory. At the time, China required European manufacturers to form a 50-50 partnership with a Chinese manufacturer: after FAW for Volkswagen, Citroën, for its part, joins forces with SAW (Second Automobile Works), now renamed Dongfeng. In 1997, General Motors will release the Buick, joining forces with the state-owned SAIC group. Peugeot, for its part, joined the race in 2004, confirming the joint venture’s name change to DPCA: Cars Dongfeng Peugeot Citroën.

Europeans are fighting in China

The group has three factories in the country, in Wuhan, Chengdu and Xiangyang (parts only), which, in particular, assemble the Citroën C5 X, including for the French market. The large sedan DS 9 is assembled in Shenzhen, at the plant it previously owned another PSA joint venture: Changan-PSA. But barely 61,000 sales for Peugeot in 2022 and 55,000 for Citroënthe group does not take off.

He is not the only one like that: In 2020, Renault terminated its joint venture with Dongfeng (DRAC).and Volkswagen, which has dominated the Chinese market for thirty years, has been displaced by BYD at the end of 2022. Since in recent years, Chinese car manufacturers have experienced rapid growth. And public companies (SAIC, FAW, Dongfeng, BAIC, Chang’an, JAC…) as private (Geely, Chery, GreatWall, GAC, BYD…). The rise of power that we can clearly see in Europe, both with these actors and with them new members (Nio, XPeng, Aiways, MG, Lynk&Co, etc.).

DPCA: the end of a more than 30-year adventure

To reduce buoyancy, Stellantis has confirmed that it is terminating the DPCA joint venture ! Already in 2022, Carlos Tavares admitted: “We don’t need a factory in China. Geopolitics are tense between China and the rest of the world.” Therefore, the group will implement the “minor assets” strategy: sell its three factories to its partner Dongfeng, which will continue to assemble models there on behalf of Peugeot and Citroën. That is, Stellantis will no longer collect on its own behalf, but will continue to sell cars in China. Transaction amount? 220 million euros. A strategy that some observers believe should pay off for a group that reduces its land, its costs and risks, but continues to use Dongfeng’s know-how and network in the region. A desirable win-win option for countering the onslaught of Chinese brands in the local market…

Read also:

Volkswagen Tavendor: a new large SUV for China

BYD confirms the arrival of three electric models in France

BYD Atto 3: we tried the 100% electric Chinese SUV