PSA Peugeot Citroen are set for some major changes in order to bring them back to one of the leading automobile manufacturing companies.
They have been struggling for some time now, particularly in Europe which was once the market where they thrived the most. The figures below show how much the company has struggled in Europe over recent years:
In Europe PSA Peugeot Citroen reported losses of 2.32 billion euros in 2013. 2012 was an even worse year for them, with losses of 5.01 billion euros, so 2013 was seen as an improvement for them overall.
PSA Peugeot Citroen Europe has recently appointed Carlos Tavares as their new CEO and they now aim to cut back on supplier costs, lower stock levels and increase their profits.
This is what Tavares had to say regarding the issue: “Remember, we want to maintain our position as a generalist manufacturer. That’s the first thing, but we will be more selective with what we build in future. We won’t invest where there is no business. Everything I’ve learned tells me we must make cars to beat the competition, so buyers will want that car, not just a car. We have not yet identified models to drop, but there will definitely be a reduction in production.”
Part of the changes for the company include the sale of 14% stakes to both the French government and Chinese automobile manufacturing company Dongfeng Motor Corp. Read our article on this issue by clicking here.
This will mean that the Peugeot stake in the company will be reduced from 25% to 14%, making them equal with the above mentioned organisations.
The Chinese company Dongfeng Motor Corp are saying that they are not intending to take control of the PSA but are aiming to help the company back to the top and also to establish itself in their local Chinese market.
The CEO of the Dongfeng Motor Corp had this to say: “It is a win-win cooperation, not a purchase deal but a way to help PSA return to growth. The goal is not limited to the Chinese domestic market, it is also to conquer the whole Asia-Pacific market.”
What is your thoughts on this merger? Let us know in our comments box below.