Stellantis Builds Flagship Citroen in China to Boost Asia Sales

Tara Patel, Bloomberg News

BC-Stellantis-Builds-Flagship-Citroen-in-China-to-Boost-Asia-Sales , Tara Patel

(Bloomberg) -- Citroen plans to start making a new crossover model in China in a first attempt by its parent Stellantis NV to make inroads into the world’s biggest auto market.

Citroen will produce the flagship C5 X -- billed as a mix between a sedan, station wagon and SUV -- at a factory in Chengdu and sell it in Europe and locally starting in the second half. The brand hasn’t taken off in Asia and relies heavily on the European market, where its sales fell 28% last year due to the pandemic.

The carmaker is following a “rational and balanced approach” when deciding where to build its cars, Vincent Cobee, head of Citroen, said in an interview with Bloomberg Television. “Manufacturing quality in China is one of best in world.”

Stellantis Chief Executive Officer Carlos Tavares has vowed to “fix” the automaker’s poor showing in the nation, where none of the company’s 14 brands have a notable foothold.

The plan to build the C5 X in China has already stirred sentiments in France, where Citroen has deep roots. Le Monde newspaper on Monday ran an opinion piece saying the decision sends a “double signal of destruction” by exposing the country’s dwindling role in global trade and its inability to retain production of higher-quality products.

Citroen isn’t alone in going to China. Renault SA came under fire last year for deciding to produce a new electric mini-SUV for Europe in the Asian nation. BMW AG started production of its iX3 in Shenyang and Tesla Inc. is exporting Model 3s built near Shanghai to Europe.

Manufacturing Hub

Some producers are even basing the manufacturing of entire lineups in China, for example Daimler AG’s Smart and Volvo Car Group’s Polestar and Lynk & Co, all three of which are jointly owned by Zhejiang Geely Holding Group.

Citroen ranked second by sales among PSA’s stable of brands last year, behind Peugeot and ahead of Opel Vauxhall. The brand generated most of its sales in Europe in 2020 and aims to improve its performance in Asia, Cobee said.

Sales of the C5 X will “probably be reasonably well balanced between China and Western Europe,” he said.