Chongqing Changan Automobile Co., Ltd (Changan Automobile) intends to transfer 50% equity stake in the Sino-French joint venture Changan PSA (CAPSA), according to a file posted on the website of Chongqing Assets and Equity Exchange (CQUAE).
The application will be disclosed to the public via CQUAE from October 28 to November 22. The Chongqing-based automaker has not revealed the intended transfer price yet and the qualification a transferee should possess.
It was rumored that Baoneng Group, a Chinese property and financial services conglomerate controlled by Chinese billionaire Yao Zhenhua, would be the potential buyer of CAPSA's equity. In fact, the project is open to all eligible investors, people with direct knowledge of the plan said.
“We're grateful to Changan Automobile for its support during the past eight years,” said Groupe PSA's Asia-Pacific unit.
Founded in 2011, CAPSA was initially 50/50 owned by China Chang'an Automobile Group Co., Ltd (CCAG) and the France-based Groupe PSA. In 2015, Changan Automobile got the joint venture's 50% share from CCAG.
CAPSA focuses on sale and production of vehicles under the premium car brand DS. Since the start of mass production in 2013, the joint venture has so far rolled out five models, which have presence in both car and SUV fields.
Nevertheless, it seems that the French premium car brand has been marginalized due to the depressed sales performance. When the joint venture was established, both original parent companies expected its annual sales to reach 100,000 units in 2014. Unfortunately, the sales target has not been achieved yet.
The gloomy sales performance is always accompanied with money loss, while PSA doesn't plan to pull DS from China's market. “We also want to make it clear that DS will remain in China and be significantly developed,” the unit added, “the brand will adopt a new development strategy there.”
