French automaker PSA Peugeot Citroen will introduce its newly-launched Citroen C5 and C4 models into China as part of efforts to lift sales in the nation.

The new models were launched at last month's Paris International Motor Show.

The C5 will arrive in China next year, as the nation lifts quotas on car imports in line with its commitments to the World Trade Organization.

The C4 will be produced at PSA Peugeot Citroen's joint venture with Dongfeng Motor Corp - one of the nation's biggest automakers - in Wuhan, the capital of Central China's Hubei Province.

Details of the C4's launch in China will be made public by the joint venture, which is also producing the Citroen Fukang, Elysee, Picasso and Xsara.

The venture sold 46,700 vehicles in the first half of this year, down from 52,200 units a year ago.

Citroen Managing Director Claude Satinet blamed the slide on the overall slowdown in the Chinese car market's growth and increased competition in the nation.

Satinet revealed that the firm was "falling short" of its previous sales target of 124,000 cars in China this year.

"I cannot tell you a new specific target," Satinet told China Daily.

Sales of China-made passenger cars stood at 1.51 million units in the first eight months of this year, a year-on-year rise of 23.68 percent.

The growth was down from last year's 75 percent due to manufacturers' frequent price cuts and government controls on car loans and insurance, seriously dampening customers' buying enthusiasm.

The National Bureau of Statistics has lowered its forecast for car output in China this year to 2.39 million units from 2.82 million units.

Analysts say most carmakers in China will fail to fulfill this year's sales targets because of the dip in market growth.

Around 45 new models were introduced in China in the first half of this year.

Citroen executives said the company will accelerate efforts to promote itself in China as an "innovative, dynamic and comfortable brand" as local customers currently do not find it "very impressive."

Dongfeng Peugeot Citroen launched a glass-roof Picasso at the end of last month, which will retail between 184,800 yuan (US$22,320) and 209,800 yuan (US$25,340).

"We will not slash prices in China on our own initiative. Instead, we will just follow others' price cuts, including Volkswagen," said Frederic Banzet, director of Citroen's international operations.

"Frequent price cuts are irresponsible for customers," he added.

The joint venture clinched a deal last month with three Chinese banks - China Everbright Bank, Citic Industrial Bank and Bank of China - to provide its dealers with car loans to increase sales.

The venture will also streamline its sales and service networks for Citroen cars in China.

The venture plans to cut the number of its main regional operations for Citroen to eight from the current 20.

The move is "our adjustment in line with the radical changes of market competition", the company said.

The venture, which started to produce the Peugeot 307 notch back in April, will introduce a Peugeot 206 next year.

The Peugeot's entry will not have a "direct impact" on Citroen's business in China, said Banzet.

The venture, which was established in 1992, aims to increase annual sales to 300,000 vehicles by 2007.

(China Daily October 18, 2004)