PSA sends heavyweight to China
Now that the corona crisis is fading in China, the industry and trade are trying to start up again. Just now, PSA has announced that it sends Grégoire Olivier, a company heavyweight, to China to replace Carlos Gomes, who has chosen to leave the company.
Grégoire Olivier is actually the secretary-general of the PSA Group, and will combine these functions with heading the China business. He knows the place, he was in charge of operations in Asia between 2010 and 2016, and from 2014 till 2016 in China, when PSA still sold significant volumes over there.
“Carlos Gomes has chosen to leave PSA at the end of June 2020 to pursue a personal entrepreneurial goal,” comments PSA in a press release. After his good performance in South-America, where he restored business for PSA, Gomes was sent to China in December 2017.
At that time, sales were already shrinking, and Gomes had the task to change this tendency. His predecessor, Denis Martin, in charge since 2016, had been confronted with a real collapse in sales during his period in China. Martin left the company at the end of 2017 “to pursue other interests”.
Since the beginning of the past decade, sales had been rising for PSA in China. Together with his Chinese partner (and shareholder), Dongfeng, it sold 710 000 cars in 2015 on the Chinese market. The aim was to reach a million in 2018.
But the opposite happened. Sales started to diminish massively every year, resulting in 117 000 sales in 2019. Again a 55% decrease compared to the year before. These are very insignificant volumes in a market that turns around 20 million units every year. Of course, the coronavirus has hit even more: 5 500 cars have been sold the first two months of 2020.
The plants PSA and Dongfeng are running in China are, of course, made for the earlier scheduled quantities; at this moment, they are practically turning on idle and losing a lot of money. Chinese activities went 700 million euros in the red, last year, forcing PSA to reduce capacity.