Automotive: PSA-Dongfeng alliance cuts half of China workforce

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A Chinese employee at the Dongfeng / PSA assembly plant in Chengdu, September 7, 2016. WANG ZHAO / AFP

Encountering commercial difficulties, the French car group PSA plans to reduce the wing in China. According to documents consulted by Reuters, PSA Peugeot-Citroen and its Chinese partner Dongfeng have decided to cut several thousand jobs.

The joint venture Dongfeng-PSA has decided to halve the number of their employees to 4 000. To achieve this, the two manufacturers are planning to close one of the 4 assembly plants they own in China and sell another one.

Information that both groups refused to comment. A reduction in production capacity in China was already mentioned in July by the press when PSA presented its first half results.

►Also read: PSA Peugeot Citroën conquers the Chinese automobile market

While the French manufacturer remains well at the global level despite a degraded market, its sales in China fell by 60% over only the first 6 months of the year.

This crisis is explained by the tendency of Chinese consumers to buy vehicles from local manufacturers. Added to this are the economic slowdown and trade tensions with the United States. Moreover, the Chinese car market is expected to fall by 5% this year.

Exclusive: PSA, Dongfeng to drop two China auto seedlings, halve workforce - document https://t.co/yuCVPO9IaB pic.twitter.com/IiqCLOspEd