China is the house that every robber baron is trying to break into. PSA Peugeot Citroën has been in-country since the early eighties, getting there with Volkswagen, but the French brand largely spent its time sniffing the plum blossoms while the German brand grabbed the dragon and tamed it. No more: PSA expects China to be its largest market by 2015, and it has spent more than a year rearranging its affairs to make a cohesive push for Chinese hearts and minds and renminbi.
After rationalizing its business operations there, Peugeot will move its wares upmarket to put space between it and Citroën, the Citroën DS line will be a standalone brand - the only place in the world where that will be the case – and according to a report in Businessweek both brands will heavily promote their association with French luxury by giving away wine and perfume to those who visit dealerships.
France, as the number one destination for Chinese tourists, does have a strong pull for the locals. But those visitors are interested in France mainly because of brands like Louboutin and Louis Vuitton, so it will take time and serious investment to find out if "premium mainstream" and "near-premium" brands can truly form a consumer bond with some of the definitive marques for sybarites.
At least the investment part isn't in question: PSA has outspent its German rivals for ad time on Chinese television, built a flagship DS World Boutique in Shanghai, will have its third plant ready to produce vehicles by the end of the year and plans to increase its dealer network coverage between the three brands from 65 percent of the country to 85 percent by 2015.