VJ Bacungan / PSA Peugeot Citroen | April 15, 2014 14:46
French automaker has lost over €7.2B since 2012
PSA Peugeot Citroen chief executive officer (CEO) Carlos Tavares has announced a business recovery plan that would reduce the struggling French car maker’s model range from 46 to 25 within six years.
Called ‘Back in the Race,’ the plan comes after Chinese car maker Dongfeng and the French government each invested nearly €800 million in February this year, in exchange for a 14 percent stake in the company.
PSA is raising another €1.4 billion from existing investors.
“We are going to focus the creative power of our teams on a more limited number of products that people want to buy,” Taveres said.
“If you have less cars you will do a better job, and the cars will be more competitive. By doing this, you will have more attractive products.”
Under the new plan, PSA will focus on its Peugeot and Citroen brands, and also develop its upmarket DS marque, alongside reducing costs and excess plant capacity.
The plan also includes PSA’s intention to accelerate its expansion in China, in partnership with Dongfeng, which it hopes will help sales in other Asian markets.
At the same time, the company said it aimed to revive its fortunes in Europe, Russia and Latin America – regions where it is losing money – within the next three years.
Tavares said the plan would halt PSA’s losses – amounting to € 7.2 billion over the past two years – by 2016 and generate profit by 2018.
Investors welcomed the plan, but were skeptical regarding the size of the task.
“While they see themselves as back in the race, they don't seem to realise that the competition is moving forward just as quickly,” said Barclays analyst Kristina Church.
Sources: BBC News and The Guardian