DS denied leaving the Chinese market!

Seven years ago, DS officially entered China. At that time, Changan Automobile and PSA Group were full of confidence in their development prospects in China. Therefore, Changan PSA Shenzhen Plant set the annual production capacity at 200,000 units at the beginning of construction. But over time, the brand's sales have not been equal to the original set goals. Recently, it is reported that Baoneng Group will acquire the Changan PSA Shenzhen factory, and also hinted that the DS brand will withdraw from the Chinese market.

To this end, IIA specifically called DS France Global Headquarters to inquire, and clearly received a written reply, said: "Building a new brand is a long journey. The Chinese market is the focus of the DS brand global development strategy deployment. DS brand will not withdraw from China as described in media reports. Instead, we will adopt a new strategy to continue our development in the Chinese market. At the same time, DS appreciates the support of 75,000 customers and will always protect their interests. At this stage, we will not comment on the next step of our strategic plan, but we will announce it in due course."

The above reply is enough to confirm that the DS brand has no intention to withdraw from China. Instead, they believe that the Chinese market is the core of the DS brand's global development strategy. At the same time, during the interview call, IIA also asked whether the Changan PSA Shenzhen Plant will be acquired by Baoneng Group or not. As of the time of this posting , no clear reply has been received.

Changan PSA Shenzhen Plant

As a large-scale automobile production base in China, Changan PSA Shenzhen Plant covers an area of about 1.3 million square meters and is divided into two complete vehicle factories and one engine factory. In September 2013, Changan PSA Shenzhen factory officially began mass production, with an annual production capacity of 200,000 units.

Regardless of the process or equipment, Changan PSA Shenzhen factory has adopted the same standards as in Europe. The body welding technology adopts the internationally leading laser welding technology, which can reduce the odor and VOC risk of coating tape, and is healthier and environmentally friendly. Not only that, the factory is also equipped with MES (manufacturing execution system) defect management system for quality inspection. After completing the four-wheel alignment, electrical inspection, body seal inspection and rain detection, the vehicle must be qualified in the road test before the vehicle can be officially off the assembly line.

Although the plant has the most advanced equipment and manufacturing processes, the DS brand's sales have continued to be poor, resulting in long-term idle capacity of the Shenzhen plant. It is reported that the factory started to produce Changan's own brand models two years ago, including the new Benben, EADO EV and other models.

Insufficient competitiveness

The DS brand has a decent sales volume in France, but it is indeed another scene in China. In 2015, the brand sold 27,000 vehicles a year, setting the peak in sales after entering the Chinese market. However, since 2016, its sales have started to decline in a cliff-like manner, from 16,100 units in 2016 to 5,800 units in 2017.

As of now, some insiders say that there are three reasons for the embarrassing situation of the DS brand. First of all, brand marketing and promotion are insufficient. Consumers do not fully understand the craftsmanship and brand style of French luxury brands. Second, the joint venture has problems at the operational level. Finally, the brand premium. All in all, wanting to be a luxury brand requires a lot of history, and the DS brand is still lacking in this regard.

In addition, DS boasts itself as a luxury brand, and its models are basically aimed at compact market segments. For example, DS7's direct competitors are BMW X1, Mercedes-Benz GLA and Audi Q3. In terms of price, DS7 does have an advantage, but it can't be compared with BBA in terms of brand influence, and it will also be strongly impacted by second-tier luxury brands.

DS brand’s dilemma

At present, the DS brand is indeed in a difficult period in China. The decline in overall sales and the idleness of the factory have made the brand marginalized. However, what we can confirm by calling the DS headquarters in France is that they will not give up the Chinese market and always believe that the Chinese market is an extremely important part of the global strategy. As for whether the Shenzhen factory will be acquired by Baoneng Group, it is still unknown. If Baoneng Group acquires Changan PSA Shenzhen factory, it can further accelerate the layout of the auto sector, and the DS brand has solved a burden in a certain sense.

Summary: Although the DS brand is not going well in China, they still have not given up and are trying to change the status quo. With the strengthening of cooperation between the shareholders, whether the DS brand can reverse the current situation remains to be verified. Regardless of the consequence, the DS brand currently has no idea of exiting the domestic market. In addition, whether the Shenzhen factory will be acquired by Baoneng Group will need to wait patiently for the final result.