On July 8, Dongfeng Motor Group (00489.HK) released the June 2020 production and sales bulletin, in which The output of DPCA was 6,827 units in June and 18,749 units in the first half of the year, down 72% year-on-year. Sales volume in June was 5,380, down 14% month-on-month and 47% year-on-year, while sales volume in the first half of the year was 23,237, down 63% year-on-year.

Wuhan region sales growth

According to the "Analysis of the National Passenger Car Market in June 2020" released by the Federation of Passenger Cars on July 8, retail sales of passenger cars reached 1.654 million in June, up 2.9 percent from May. Down from a year earlier in June 6.. 2%. According to the analysis of the Federation of Passenger Transport, the retail base was abnormally high due to the dumping of goods at low prices in June 2019, and the analysis mainly looked at the month-on-month strength in June. So this year, China's Passenger car market in June is showing recovery growth.

Dongfeng Peugeot's new 2008 and 408 models and Citroen's C3L, which were launched in May and June, have yet to generate sales growth. And in Wuhan area under a series of policies to stimulate consumption, it is reported that June Dongfeng Peugeot sales growth month-on-month.

According to dongfeng Peugeot, "In The Wuhan region of Dongfeng Peugeot, the market share in May increased by 10% month-on-month and 1% year-on-year, and the delivery in June increased by 15% month-on-month".

"Wuhan area is the most important market dpca", held in July 3, dongfeng Peugeot wuhan regional marketing symposium, dongfeng-citroen automobile executive vice general manager li pointed out that "wuhan market is also has the advantage of market, which have multiple favorable factors such as climate, geographical and human, to do bigger and stronger market in wuhan, to brand, and the dragon has demonstrate the important role of led drive.

Dongfeng and PSA increased their support

Dpca's "difficult" situation in the domestic car market was compared with its exit from the passenger car sector after Renault split. And Dongfeng Yulon withdrew from the mainland market, the development of DPCA has been questioned for many times both inside and outside the industry.

In the face of doubts and concerns, dongfeng, PSA and DPCA reiterated at the media communication conference in June this year that DPCA had never given up on the Chinese market. "The Chinese market is one of the most important strategic markets in the world for PSA, which will never give up. Relying on DPCA, the strategy of actively exploring the Chinese market will never change."

At the same time, dPCA stressed that "dPCA's strategic position in the shareholders' business has not changed; There is no change in achieving immediate and long-term goals; The confidence in DPCA's 'return to the track' has not changed."

In 2019, in order to realize brand rejuvenation, DMC has formulated the "yuan" plan, which will be implemented for six years and the sales target is set at 400,000 units. However, due to the shutdown caused by the epidemic, the implementation of the "yuan" plan was forced to be suspended only in April, which means that the first Emperor has not yet started his business. At the same time, in the domestic auto market, the mainstream joint venture brand "the stronger the stronger" is changing due to the unstable income of consumers, which also leads to the fact that DPCA is still struggling to restart.

It is reported that in order to ensure and support the smooth progress of the "yuan" plan, Dongfeng Group and PSA reached an agreement that the term of the joint venture of Dongfeng Motor has been extended from the previous 2027 to 2037. At the same time, both shareholders will meet the needs of the Chinese market, with a more competitive cost for Dongfeng Citroen, Dongfeng Peugeot brand to supplement new products. DMC will also be fully supported in terms of brand promotion costs, business and management efficiency.

Some of PSA's global models are also planned for production and export to Dongfeng Peugeot Citroen, which industry insiders believe will help the company dispose of spare capacity. It is understood that DPCA is the only production base for PSA Group's global strategic model project E43. The E43 is the successor to the all-new Citroen C5, which is scheduled to hit the market in 2021.