Private Chinese conglomerate Baoneng Investment Group is on track to purchase PSA’s assembly plant in the south China city of Shenzhen, where the French automaker builds Citroen DS models.
The factory is operated by Changan PSA, a 50-50 joint venture between PSA and Chinese automaker Changan Automobile Co.
Changan disclosed Tuesday that it had signed a deal to sell its stake in the joint venture to Baoneng for 1.63 billion yuan ($234 million).
Citing sources at Baoneng and PSA’s Asia Pacific office, the Paper, a news website run by the Shanghai city government, reported earlier that PSA has also agreed to transfer its 50-percent share in Changan PSA to Baoneng.
Changan PSA was established in 2011. With annual production capacity of 200,000 vehicles, the joint venture has failed to achieve meaningful sales after launching output in 2013.
Changan PSA’s annual sales declined from around 23,000 in 2014 to about 3,900 in 2018, according to the China Passenger Car Alliance, a Shanghai-based consultancy.
In the first 11 months of 2019, the joint venture delivered around 2,040 vehicles.
With dismal sales, Changan PSA racked up cumulative losses of 4.9 billion yuan ($696 million) through September 2019, according to Changan.
PSA also runs a joint venture with state-owned Chinese automaker Dongfeng Motor Group, which produces and distributes Peugeot and Citroen cars.
Baoneng, which mainly operates in China’s retail, real estate development and life insurance sectors, ventured into auto manufacturing in 2018 by acquiring 51 percent of Qoros Automotive Co., a small carmaker based in Shanghai.
