Tavares has said repeatedly that as a global company, PSA needs to be a player in China, which dwarfs all other markets by size. But volumes have fallen off a cliff since 2014, from more than 700,000 to far below 100,000 this year, and PSA dissolved one of its two joint ventures last year.
It’s unclear what can be done to stop the red ink at this point, as the mass market is increasingly dominated by Chinese domestic manufacturers, and premium buyers have been unconvinced by the DS brand. Tavares, however, has said that he thinks the merger with FCA will offer the chance for a fresh start.
FCA has faced similar difficulties: Sales in China were down to 92,000 in 2019 from 163,000 in 2018; of these, 73,000 units were Jeeps assembled in China by a joint venture with GAC Motor. The latter builds gasoline and plug-in hybrid variants of the Jeep Grand Commander as well as the gasoline versions of the Renegade, Compass and Cherokee.
Sales in September fell 36 percent from a year earlier to 3,862, with year-to-date volume plummeting 47 percent to 27,675, according to GAC.
FCA also sells Jeep Wranglers and Grand Cherokees, Alfa Romeos and Maseratis in China. In 2019, Maserati sold 24 percent of its cars there.
Andrea Malan contributed to this report