As an effort to show that France is not only a producer of fine luxuries but also of fine cars, PSA/Peugeot-Citroen had its dealers in China give away wine and perfume to prospective customers. PSA is trying hard to link its vehicles to the allures of France as it sees this as critical in its move to upmarket and challenge luxury carmakers like BMW.
PSA has no other choice but to hope that this wager wins them big time, since it regards China as key to stem its loss-making ways and to cut its reliance on Europe, where the vehicle market is still in a slump.
Likewise, the carmaker is experiencing slow or even non-existent growth in other emerging markets like Russia and Brazil. PSA is expecting sales in Brazil and Russia to decline in 2013, while its operations in India aren't yet up and running. PSA’s latest push to link more itself with its homeland may risk drawing consumer apathy toward French cars.
Speaking for himself, Shanghai resident Herbert Rong said that while German cars are reliable and American brands are linked to muscle cars and design, French cars don’t have key selling points to him. PSA considers China as very critical to achieving its target of selling a majority of its vehicles overseas for the first time by 2015.
PSA will build upscale DS models at a new site in Shenzhen, China, which gives the carmaker an annual production capacity of up to 950,000 vehicles in China. However, that pales in compares to the number of vehicles sold by Volkswagen Group in 2012 in China at 2.81 million.
VW recently opened a new site in Foshan, China with a 300,000 vehicle capacity. VW is planning to double that in the coming years. PSA is bringing upscale DS line in China as part of its bid to increase its market share in the country to 5 percent in two years. The DS5 will have a starting price of CHY235,000, more than double the price of the Citroen C-Quatre sedan. [source: Autoblog]