PSA Group said it plans to sell its stake in its underperforming joint venture with China's Chongqing Changan Automotive (Changan Auto), according to reports in China.
The 50/50 joint venture, called Changan Peugeot Automobile (CAPSA), was established in 2011 and operates a plant in Shenzhen in Guangdong Province with a production capacity of 200,000 vehicles and engines per year. It is focused on PSA's DS brand.
Separate reports also suggested Changan Auto was also looking to sell out of the joint venture, as signaled in recent regulatory filings, meaning the plant is being put up for sale to a third party.
CAPSA has struggled to establish the DS brand in China with reports showing it sold just 3,900 vehicles in 2018 and volume has fallen further this year – to 1,300 units in the January-October period.
Peugeot said it had no intention of withdrawing DS from China, however.
A company spokesperson said "while the two partners plan to sell their stakes in their joint venture, this does not change anything regarding DS' presence and development in China. A new strategic plan will be announced in the coming months".
PSA said Chinese group Baoneng was a potential buyer for its share in the joint venture and the board was scheduled to review the sale in its next meeting on 6 December.
PSA's main joint venture in China is with Dongfeng Motor, called Dongfeng Peugeot-Citroen Automobile Company (DPCA), based in Wuhan in Hubei province. It too has been unable to grow with the local market over the last several years and in August it announced plans to cut its workforce by half to 4,000 people by 2022 and sell two of its four factories.
DPCA has an annual capacity of 1m vehicles a year but sold just 253,000 units in 2018.
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