PSA expects China to overtake France as its largest market by 2015

Article by Anita Panait, on February 27, 2013

PSA/Peugeot-Citroen expects China to surpass France as its largest market as early as 2015 as the French carmaker increases the number of dealerships and penetrates into smaller Chinese cities. PSA expects to post a 22-percent jump in sales in China to 540,000 vehicles, excluding its upscale DS line, according to Gregoire Olivier, chief executive officer of the French carmaker’s Asian operations.

PSA is planning to roll out the revamped Citroen C-Elysee and Peugeot 301 sedan models in China this year, and is preparing its flagship DS dealership in Shanghai. Olivier told Bloomberg in an interview that they expect to post another good year in China this 2013. He noted that PSA is working on a “very active development plan and very nice growth."

PSA’s increasing presence in China is expected to help the carmaker lessen its reliance on Europe, where the vehicle market is predicted to suffer another decline for the sixth straight year. To gain in China, PSA will have to attract customers away from General Motors Co. and Volkswagen, which are the best-selling foreign carmakers in the country.

John Zeng, the managing director of auto researcher LMC Automotive, remarked that the DS brand has “no influence at all” in the premium segment, so PSA will be facing a tough challenge in China. Zeng added that the Peugeot and Citroen brands still have lots of work to do in terms of bringing the proper products to China.

To raise brand awareness among Chinese consumers, PSA will increase advertising and marketing activities to support its launch of models like the Peugeot 3008, Olivier said. According to Advertising Age, PSA outbid Volkswagen to become the top foreign spender for prime-time advertising slots in 2013 at China Central Television. PSA plans to hike the number of dealerships for its Peugeot, Citroen and DS brands by 27 percent to 944 this year. Its least expensive model in China is the Citroen C2, which has a starting price of CHY71,800 ($11,500).

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