PSA Peugeot Citroen is confident that the new car market in China will continue to grow by 10% annually for several years yet.
Chief executive Phillippe Varin, who was attending the unveil of the Citroen DS5 at the Shanghai show, said the decade ahead would see the Asian market as the major engine of growth for the automotive sector.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
In a move that illustrates the importance of China, the world’s largest auto market, Citroen took the wraps off its new DS5 premium five-seater car in Shanghai in a ceremony the day before the show opened to the media.
Managing director Frederic Banzet said China would account for 30% of the brand’s sales by 2020, compared with 16% now.
Citroen hopes the DS5 will lure younger customers in China, Varin said, adding that the premium sector was particularly important in the Chinese market.
The DS5 is the third in the DS range that revives the name of the iconic cars produced from the 1950s to 1970s. PSA plans to set up a dedicated network of DS dealerships in China to underscore the exclusivity of the range.
Earlier this year PSA said it expected the Chinese market to maintain double-digit growth in 2011. Varin said that China was now a “cornerstone” of its strategy to become more international.
PSA will produce DS5s, the latest model in its DS range, in China with its new partner Changan Automobile and in Europe at its Sochaux factory in France.
The China facility will have an initial capacity of 200,000 units, Varin said.
PSA and Changan, the state parent of Chongqing Changan Automobile Co, signed a deal for a 50-50 manufacturing joint venture in July 2010. The partners are waiting for the final approval from the Chinese government although Varin said that he did not expect any problems with this.
