2018 for French cars in China: Dismal!

As the Lunar New Year draws near, car companies are releasing sales results for 2018. If the performance of the French cars in the domestic auto market has been tepid before, the sales of French cars last year can be said to have dropped to the bottom in recent years. In today's competitive and strong Chinese car market, their survival situation is worrying. Dongfeng Peugeot and Dongfeng Citroen's Shenlong Automobile Co. Ltd. Sold 253,400 vehicles in 2018, down 32.9% from 2017, according to the China Association of Automotive Manufacturers' latest production and sales data. Chang'an Peugeot Citroen Motor Co. Ltd. Sold 3,867 vehicles in 2018, down 36.5 percent from 2017; Dongfeng Renault Motor Co. Ltd. Sold 50,000 vehicles in 2018, down 30.6% from 2017. French auto makers all saw sales drop more than 30% in 2018, and their market share in China fell to 1.29%, the lowest level in a decade. Unlike Volkswagen, which was the first to enter the Chinese market, the French cars entered China in the 1980s, but their development has experienced a lot of ups and downs. Especially Peugeot, which is the support of the sales volume of French cars. French Peugeot set up a joint venture in Guangzhou in 1985-Peugeot Guangzhou. Guangzhou Peugeot 505SW8, 505SX and 504 models were once in short supply on the market. But buoyant sales have led Peugeot to ignore the introduction of new technology and lower costs, leading to competitive models Peugeot's sales in Guangzhou peaked in the mid-to late 1990s and then bottomed out. In 1997, Peugeot sold just over 900 vehicles a year in Guangzhou. Honda bought French Peugeot shares and debt in China in 1997 for a nominal price of $1. But in the face of China's fast-growing car market, French car companies are not willing to stand aside. In October 2002, Dongfeng Motor Company signed a joint venture contract with French PSA Group (Peugeot Citroen Group) to expand cooperation. Dongfeng Peugeot and Dongfeng Citroen both belong to Dongfeng Citroen Motor Company. After the establishment of the joint venture, the newly reborn French cars in China have been on the track of sales growth year by year. In 2015, DPCA sold 710,000 vehicles, the highest number ever. Sales of Shenlong cars began to turn negative in 2016 from positive growth and continued to decline in 2017. In 2016, the annual sales volume of Shenlong Automobile was 600,000, down 15.6% year-on-year. In 2017, the sales volume of Shenlong Automobile further declined to 434,000. In 1992, Citroen collaborated with Dongfeng to bring Citroen ZX into China and named it Fukang. It has been nearly 17 years since China entered the auto market, with a total of 500,000 cars in its possession. But as the domestic automotive industry grows faster and faster, Fukang has been conservative attitude towards the face, and then slowly fade out of consumer choice, in 2008, this old car serving 500,000 families announced the suspension. Face 2017 Sales Decline, January 10, 2018, Shenlong Motor Co., Ltd. Dongfeng Peugeot and Dongfeng Citroen Brand Department will be relocated back to Wuhan. Liu Weidong, deputy general manager of Dongfeng Automobile Group and former chairman of the board of Dongfeng Dragon Company, said that the decision to move back to Wuhan was partly because Wuhan now enjoys convenient transportation and there is no shortage of talented people. But more importantly, operating costs are too high in Beijing and Guangzhou. In fact, with the increasing sales of Dongfeng Peugeot and Dongfeng Citroen, the contradiction of "production and marketing coordination" within Dongfeng Peugeot and Dongfeng Citroen Group is gradually exposed. Dongfeng Peugeot and Dongfeng Citroen are located in Beijing and Shanghai respectively, headquartered in Wuhan, Hubei Province, Corporate headquarters wanted to increase control of the two brands in a geographically close way, but this was not recognized by the two brands, so there was a lot of negative information, and internal adjustments added uncertainty to the market performance of the company's products at a time when sales should have been stable. Dealer and consumer confidence has also been hit to some extent. Dongfeng Peugeot ranked last among all 26 auto brands surveyed in the 2016 China Automobile Dealers' Satisfaction Survey on Suppliers, released by the All-China Federation of Automobile Dealers Association. Dragon management in 2017 when facing the media communication, that is external and internal causes of the Dragon's plight. Externally speaking, there are three major changes in the Chinese market in the past two years: the dragon 's response to the explosive growth and development of the Chinese SUV market, the rapid growth of its own brands, and the rebound of Japanese brands is relatively lagging behind the changes in the external environment. But from the internal reason, the dragon "marketing power did not progress, suddenly Depending on the dealer, the inventory is very large, leading to the whole price system chaos ", in addition, the dragon's management system has not kept up with the construction." But the situation hasn't changed, with the Dongfeng Peugeot Inventory Depth Index rising from 2.2 to 3.8, the highest in the country, according to the November 2018 China Automobile Dealers Inventory Warning Index Survey released by the China Association of Automobile Circulation. In addition, Shenlong Automobile and PSA Group jointly created the Chinese automotive service repair brand "Sunshine Craftsman", dealers are also believed to be competing for the market, leading to dealers dissatisfaction. In addition to the many internal frictions in business management and dealer maintenance, there have been many errors in product strategy for French vehicles. Dongfeng Peugeot products have been priced high phenomenon, in the brand power is not as competitive as the case, the price is the same as the competitors, and consumers simply refuse to pay for it. The Dongfeng Peugeot 4008 received more than 10,000 down-payment orders before it went public in 2017. But after the price was released, it was seen as significantly exceeding market expectations, and more than 5,000 users unsubscribed the next day. In January 2018, the Dongfeng Peugeot 4008 model was updated to 2018 model, but this model has not changed in appearance and powertrain, the most surprising is the model configuration has been reduced, but the price has not changed, by the majority of netizens described as a "cut with no reduction in the price of the change." Then on October 26th Dongfeng Peugeot slashed the price of its 3008, 4008 and 5008 SUVs and added them to its fleet Integrity. But at this time, the domestic car market "winter" has arrived, the SUV market has not been the courage of the year. Auto market expert Yan Jinghui believes that after the French car entered the country has made brilliant achievements, Peugeot and Citroen have been deeply rooted in the hearts of the people. However, brand power should be promoted by product power and marketing together to achieve growth, and obviously the legal system car did not seize the opportunity, in the product and marketing aspects repeatedly "empty". First of all, its lack of familiarity with the Chinese market, did not grasp the pulse of changes in consumer demand, such as SUV popularity, the introduction of French cars significantly lagged behind other enterprises, gradually lost ground. Secondly, the depth and breadth of product marketing has not been achieved, such as DS into China, the product line is not rich enough, especially in the promotion, no sustained, targeted publicity, resulting in the lack of understanding of the brand, and even many consumers are very strange to the brand. Yen Ching-hui points out that at a time when the development of automotive products into new energy sources is accelerating, it seems that French cars are still one step behind other competitors, and so far there is no strategic layout for new energy vehicles that can shine a light on people's eyes. He believes that in order to do a good turn for the better, the legal car must be comprehensively upgraded in the aspects of enterprise management, grasping the policy orientation, strategic layout, product marketing, and so on.