Changan Automobile Co. plans to sell the 50 percent stake it holds in its unprofitable joint venture with PSA Peugeot Citroen, which builds and markets Citroen DS cars.
Changan, based in the Southwest China municipality of Chongqing, put the stake up for sale on Oct. 28, using a local exchange that trades corporate assets and other equity.
Investors can bid for the 50 percent interest in Changan PSA from until Nov. 22, according to information disclosed by the Chongqing Assets and Equity Exchange.
Changan PSA, incorporated in 2011 in the south China city of Shenzhen, is a 50-50 partnership between Changan and PSA.
The joint venture has capacity to produce 200,000 vehicles a year but has struggled with losses due to dismal sales.
Changan PSA launched output in 2013. Its annual sales have shrunk 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 three quarters, the joint venture delivered only 2,030 vehicles.
As a result, Changan PSA has lost 4.9 billion yuan ($696 million) this year through September, according to Changan.
In China, PSA also operates a joint venture with state-owned Chinese automaker Dongfeng Motor Group, which produces and distributes Peugeot and Citroen cars.
Dongfeng Peugeot Citroen, based in the central China city of Wuhan, can build up to 840,000 vehicles annually.
After hitting a high of 700,000 in 2015, the partnership’s annual deliveries have steadily dropped. In 2018, sales plunged 33 percent to around 253,000.
Dongfeng Peugeot Citroen’s slump has accelerated this year, with volume tumbling 56 percent to 91,049 in the first nine months, according to Dongfeng.
The joint venture lost more than 2.5 billion yuan in the first half of 2019.
The latest financial report card on Dongfeng Peugeot Citroen hasn’t been disclosed.
PSA and Fiat Chrysler Automobiles last week disclosed plans to merge but it remains unknown what the two global automakers will do with their China operations.
In China, Fiat Chrysler assembles and sells Jeep brand SUVs at a joint venture with GAC Motor Co., which is also a state-owned company.
GAC FCA, established in 2010 in the central China city of Changsha, operates plants in Changsha and the south China city of Guangzhou, which combined can produce up to 328,000 vehicles a year.
But the joint venture sold only 21,706 vehicles in China in 2018, a decline of 41 percent. In the first three quarters, sales nosedived 46 percent to 52,372, according to GAC.