The PSA Group and Changan Automobile will put an end to their struggling joint venture in China aimed at producing and selling DS models.
According to a PSA spokesman, the French carmaker will continue to produce and sell DS cars in China, just not with Changan. As far as PSA is concerned, they also have a second, larger joint venture deal in the world’s largest car market with Dongfeng Motor, as reported by Autonews Europe.
“We would like to thank Changan for their support over the past eight years and confirm that DS brand will continue its presence and development in China,” said the automaker in an official statement. “DS Brand will deploy a new strategic approach to develop our business in this strategic market. Psa Group is fully committed to China.”
Meanwhile, a Chinese outlet dubbed Yicai Global reported that Changan was seeking to sell its half of the venture, which had lost almost $700 million in the past six years as per the Chongqing United Assets and Equity Exchange. These assets are to be listed on November 22.
PSA’s sales in China have declined from more than 700,000 units in 2014 to just 94,000 in the first nine months of 2019. Even more shocking though were DS’ sales in China and Southeast Asia, with just 311 units sold in Q3 of this year.
The PSA-Changan joint venture received a 500 million euro ($558 million) boost in 2017 to improve utilization rates at the Chongqing factory, which has an annual capacity of 200,000 units, yet has produced just one-tenth of that number in recent years.