Why PSA, Fiat Chrysler are likely to cut models, brands in China after merger

PARIS — The broad outlines of the plans by PSA Group and Fiat Chrysler Automobiles to regain lost ground in China under Stellantis, their future combined company, are starting to emerge: fewer brands, fewer models and fewer factories. 

“It’s not reasonable to think that we will continue with so many brands, so many platforms and so many car lines in Stellantis, given the volumes that the combined entities are doing,” PSA CFO Philippe de Rovira told analysts last week. 

De Rovira said PSA had recently sold one factory it operated with joint venture partner Dongfeng and closed another, as it works to lower fixed costs in the money-losing partnership, called DPCA. 

China was once PSA’s largest single market, where the automaker sold more than 700,000 vehicles a year as recently as 2014. In 2019 the group sold about 119,000 cars in the country, and this year, it is likely to sell fewer than 50,000. Sales in 2020 through September were 31,239, a 64 percent decrease from the same period in 2019. 

FCA now sells only the Jeep brand in China. The automaker builds gasoline and plug-in hybrid variants of the Jeep Grand Commander as well as the gasoline models of the Renegade, Compass and Cherokee at its joint venture with GAC Motor. 

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.