PSA and FCA are hoping to finalise a $50 billion merger in early 2021 that would create the fourth-biggest car maker in the world.
"We are in China to stay, we need to find a formula in order to succeed," Tavares said.
Car sales of PSA in China have dropped by 55% to 117,084 units in 2019 due to fierce competition from local rivals. Its production site in the country is tailored to produce 1 million cars per year.
FCA has a co-enterprise with Guangzhou Automobile Group (GAC) in China, which has a 0.35% market share for passenger cars.
FCA Group vehicles' sales in China were down to 90,000 in 2019 from 163,000 in 2018, according to its annual report.
(Reporting by Gilles Guillaume, additional reporting by Giulio Piovaccari; Writing by Maya Nikolaeva; editing by David Evans and Elaine Hardcastle)
