PSA sees no turnaround in Chinese sales soon

Bloomberg

PSA Group is unlikely to revive its car sales soon in China, the world’s largest automotive market, until the automaker can improve staffing at dealerships, Chief Financial Officer Jean-Baptiste de Chatillon said. “We need to address and fix some human resources aspects of the question” following a 46 percent plunge in the French manufacturer’s first-quarter deliveries in China and Southeast Asia, de Chatillon told analysts Wednesday on a conference call. “Sales and marketing skills are the main issue,” and the company must “reconstruct relationships with dealers.”
The Paris-based maker of Peugeot, Citroen and DS cars operates in China through manufacturing joint ventures with local partners Dongfeng Motor Corp., one of PSA’s main investors, and Chongqing Changan Automobile. It’s adding sport utility vehicles in an effort to revive flagging demand as customers shift from sedans. The drop in its Chinese sales, along with unchanged sales in Europe, held back PSA’s worldwide delivery growth to 4.2 percent in the first quarter. “Performance over the first quarter is not so impressive as it does not imply real market share gain, despite sales recovery in Iran,” while the delivery plunge in China was “quite alarming,” Xavier Caroen, an analyst at Bryan
Garnier & Co., wrote in a report.