In late October, Shenlong Automobile issued an open letter on its official WeChat account stating that the current development of Shenlong Automobile has encountered setbacks, which has put a lot of pressure on our customers, dealers, suppliers and other partners. Shenlong Motors stated that at present, Shenlong Motors has made various preparations for "breaking the boat and sinking the boat". According to
data, Shenlong Motors is a joint venture company jointly funded by Dongfeng Motor and PSA Group in 1992. It owns two major automobile brands, Peugeot and Citroen. From the perspective of time, it is not too late for Shenlong Automobile to enter the Chinese market, but it is currently one of the worst joint venture car companies.
After the peak sales volume of 704,800 units of Shenlong Automobile in 2015, Shenlong Automobile began to decline. Since 2016, Shenlong Automobile has experienced a slashing decline, from 704,800 vehicles in 2015 to 113,600 vehicles in 2019. The cumulative sales of Shenlong Automobile in the first August of this year were only 81,045 vehicles, a decline of 63.36%.
Faced with continued losses in sales and performance, PSA Group and Dongfeng Motor announced that they will provide 50 million euros to Shenlong in the fourth quarter of this year. Dongfeng will also provide strong support for the liquidity needs of Shenlong Motors production and operation.
In addition, from 2020 to 2037, PSA Group will provide Dongfeng Peugeot and Dongfeng Citroen with hundreds of millions of yuan in funds each year for the brand image construction and channel development of Dongfeng Peugeot and Dongfeng Citroen. At the same time, the two major shareholders also decided to increase the capital of Shenlong in the first quarter of 2021 to ensure the future development of Shenlong Automobile.
Previously, there were still three major brands of Renault, Peugeot and Citroen in the domestic French brand market. Since Dongfeng Renault announced its withdrawal from China's fuel passenger car market in April this year, Shenlong Automobile has lost one comrade.
For Shenlong Motors, although it has two brands, Peugeot and Citroen, sales have been slashed since 2016. In September last year, Shenlong Automobile launched the "Yuan" revival plan, including brand promotion, business support, financial support, and management efficiency improvement measures to change the continued sluggish sales and performance.
However, it has been one year since the announcement of the "Yuan" plan until its implementation, but Shenlong Motors has not shown any significant improvement in sales performance. According to an announcement issued by Dongfeng Group, in the first half of 2020, the combined revenue of Shenlong Automobile and Dongfeng Peugeot Citroen Sales Company was 386 million euros (approximately RMB 2.99 billion), a year-on-year decrease of 58%; net loss of 168 million euros (approximately) RMB 1.3 billion), a year-on-year decrease of 48.3%.
At present, the market concentration of various domestic passenger car series is continuously increasing. The French brand market with Peugeot and Citroen as the main market has fallen to 3% of the domestic passenger car market. Faced with the continuous upward development of Japanese-German brands and domestic independent brands, Dongfeng Renault will be a lesson for the past if Dongfeng Renault does not make changes. Nowadays, Shenlong's preparations for "breaking the boat and sinking the boat" can also be said to be the "last battle" of the French brand in China.
