PSA：JV in China to Produce SUV and H-E

　　Editor's Notes: On September 3, the International Summit of the Development of China' Auto Industry was held in Binhai New Area in the city of Tianjin. Government officials, executives from companies attended the meeting and had discussions, focusing on the annual topic-"the transformation and upgrading of China’s automobile industry". Over 600 distinguished guests attended the forum, including government officials, industry leaders and business heads and scholars. At the scene of the meeting, Sohu Auto had an exclusive interview with Grégoire Olivier, the Vice President of PSA Peugeot Citroen and the President of the automaker's business in Asia.

　　Sohu Auto: I am so glad that you could accept Sohu's invitation for an interview. Is this your first time to have an interview with Chinese media?

　　Grégoire Olivier: Yes. As to the new job which I took recently, it is my first time to have a talk with Chinese media.

　　Sohu Auto: Ok. Let's begin with your new job. I know that you became the President of PSA Peugeot Citroen's operations in Asia three days ago. So could you introduce the main functions and basic structure of PSA's operations in Asia?

　　Grégoire Olivier: You got the point. As a member of the global branches of PSA Group, I officially took office on September 1 and I am responsible for the overall business in Asia. PSA's operations in China were also upgraded. So why did PSA change the regional structure? We hope that we can achieve faster growth in China and get a better future in Asian market.

　　Sohu Auto: After the Asian headquarters of PSA is established, what changes will take place regarding the functions and structure of PSA's operations in China?

　　Grégoire Olivier: Of course, the changes which take place in China are far complicated than the upgrading of institutions. The overall strategy of PSA in China can be divided into three parts. First of all, we will enhance the cooperation with Dongfeng Peugeot Citroen Automobile and achieve our initial promise to introduce more products. You know PSA has a plan that we introduce a new model every year. The second part is about the cooperation with our new partner-Chang'an Group. Several days ago we signed the deal with the Municipal Government of Shenzhen. According the agreement reached by two sides, we will produce light commercial vehicles and passenger cars in China. In Europe, PSA ranks first in the field of light commercial vehicles. In China, that segment has not been fully exploited. We will introduce the DS series of Citroen in China and at the same time to establish a new brand. Moreover, we have to explore the rules of market and participate in the competition. At the same time, we will coordinate the relationship between PSA and Chang'an and make the distinction in products structure clear. As to the third part, PSA will strengthen our R&D center in Shanghai. As a part of the global R&D center of PSA, the center in Shanghai was initially established in 2007. Till now there are over 400 staffers, covering engineering design department, design department and etc. Have you ever been to the France's pavilion in Shanghai World Expo?

　　Sohu Auto: I have been to World Expo in Shanghai. However, there were too many people in the pavilion of France. Therefore I did not step into the hall.

　　Grégoire Olivier: You should have had a look in the pavilion. PSA has some displays in the hall, bringing a number of high-end concept models. Those models were designed in Shanghai R&D center. Those models are very exciting.

　　Sohu Auto: Well, just now you have mentioned that you took office recently. In your tenure, what's the overall strategy for PSA's operations in China?

　　Grégoire Olivier: Our first goal is to occupy more segments of markets in China, including the segment of mainstream models. You know PSA has done a great job in the market of light commercial vehicles in China and PSA ranks first in Europe. Regarding the expansion in China, PSA may rank first across the globe. In terms of other models such as SUV, PSA has not participated in that segment. However, we are ready to face the challenge. PSA is aiming at covering as many market segments as possible in China. Second, we want to continue to expand our marketing network. We also hope to have more sales outlets in first-tier and second-tier cities while marching into the third and fourth-tier cities.

　　Sohu Auto: Can you give us some quantitative targets?

　　Grégoire Olivier: Sorry, I still can not release very specific information. I can tell you that we will enter a lower-level market to expand our market share and achieve higher profits.

　　Sohu Auto: As to the joint venture established by PSA and Chang'an, how could it become a major player in China's auto market?

　　Grégoire Olivier: This is a very important part of PSA's strategy in China. I mentioned that there are two segments we have not yet entered. The first one is the light commercial vehicle market. We have just signed a new cooperation agreement with Chang'an. The new joint venture is waiting for the approval from Chinese government, which will get us into a new area and provide new products and new services. Light commercial vehicles are important. We will introduce Citroen DS series. You will find more and more international models of light commercial vehicles. The European light commercial vehicles are very different from ones in China. We will introduce more and more technologies of European light commercial vehicles to China and carry out the localization work. On the other hand, the light commercial vehicles produced in China will be sold in other countries. At the same time, we have to constantly enrich our market segments and produce various models of light commercial vehicles. Moreover, as to another market segment which we have not yet entered-luxury cars, PSA is also considering measures.

　　Sohu Auto: I would like to talk about another partner of PSA-Dongfeng Peugeot Citroen Automobile. Regarding the future development of Dongfeng Peugeot Citroen Automobile, there are a lot of concerns within the auto industry. What's PSA's future plan?

　　Grégoire Olivier: The cooperation with Dongfeng Peugeot Citroen Automobile is concerned with two brands. First is Peugeot and second is Citroen. Within two years, the two brands have already covered almost all major models in C and D levels. In the small car market, PSA still has some advantages. At present, Chinese auto industry is developing rapidly and there are more demands in large vehicles market. Therefore we introduced Citroen C5 Peugeot 408 and other models timely. The next model which we will introduce is Peugeot 508, which will be produced in the city of Wuhan. We will gradually introduce new models to enter the market which we haven't conquered, such as the segment market of SUV.

　　Sohu Auto: We know that PSA has been developing business in China for two decades. In the past there were experiences of success and failure. Could you summarize the experience and lessons which PSA learned in China during the past 20 years?

　　Grégoire Olivier: We all know that PSA has been making changes continuously in China during the 20-year period. The development of China’s auto market is so rapidly that we have to make some adjustments. We must also adapt to these changes, and work together with our partners to adjust the strategy. Regarding the products, 20 years ago, we introduced the original European models to China. The market environment and the tastes of Chinese consumers are constantly changing. We must make some changes, to maximize localization elements. Therefore, we specially set up R & D center in China. We have also seen a trend in Chinese market that there are great potentials, and there are many things which we can do.

　　Sohu Auto: In the morning you revealed some forecast data. You said that China's auto market would reach four times the size of the U.S. auto market. How could you draw such kind of conclusion? What do you think about the future and prospect of China's auto market?

　　Grégoire Olivier: Even now, the size of China's auto market also ranks first in the world. In the year of 2009, the production and sales of vehicles reached up to 13 million units. However, there are less than 30 cars among a thousand people. Therefore there are great potentials. (Translator: Qinghua/Hanxin)

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