Peugeot CEO Tavares says Fiat needs to review China strategy

Peugeot CEO Carlos Tavares stated on Friday PSA and Fiat Chrysler (FCA) will have to evaluate their strategy in China in order to increase sales after the closing of the merger between the two groups.

PSA and FCA are hoping to finalize a $50 billion merger in early 2021 that would establish the fourth-biggest automaker in the world.

“We are in China to stay, we need to find a formula in order to succeed,” Tavares stated.

Car sales of PSA in China have declined by 55% to 117,084 units in 2019 because of competition from local competitors. Its production site in the country is tailored to produce 1 million cars annually.

Fiat Chrysler has a co-enterprise with Guangzhou Automobile Group (GAC) in the country, which has a 0.35% market share for passenger cars.

FCA Group vehicles’ sales in China dropped to 90,000 in 2019 from 163,000 in 2018, its annual report showed.