With Friends Like These: GM-Partner PSA Peugeot Citroen Gets It On The Chin

by Bertel Schmitt

Published: July 6th, 2012

with friends like these gm partner psa peugeot citroen gets it on the chin

GM got itself a great new partner. Global sales of PSA Peugeot Citroen, the besieged company that is now 7 percent owned by the General, dropped 13 percent, Reuters says. PSA’s European sales dropped 15 percent, which illustrates how much PSA’s ill fortunes are tied to those of Europe.

“The Group remains adversely impacted by an unfavorable market mix, with the most promising markets for the Peugeot and Citroën brands (France, Spain and Italy) all suffering from deep recession,” PSA says in a statement. Those markets promise more blood and tears for the next few years.

Sales of CKD (complete knocked down) units are knocked down by 31 percent to 143,000, and you probably know why. Says PSA:

“The increased sanctions against Iran made it impossible to finance Iran-bound sales of CKD units, which led the Group to suspend these sales during the first half, in compliance with international regulations.”

No word of parts sales to Iran. They can be more profitable than a few CKD units.

Tow thirds of PSA’s sales are in Europe. In its second-largest market, Latin America, PSA lost more than 20 percent in the first six months of 2012. PSA is an also-run in the growth markets of China and Russia. It sold an additional 20,000 units in these markets from January through June, a drop in the badly leaking bucket.

#BertelSchmitt #France #GM #PSA

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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6 comments

Marcelo de Vasconcellos on Jul 06, 2012

Here in Brazil, the problem is threefold: 1 - The cars are too pricey. The competition offers the same at better prices. Why buy? Maybe design, but design is not enough to move the metal in price conscious markets such as Latin America. To wit, with the Logan family line Renault is gaining on the market. Good price and content, simple design, good price win. And the opposite of PSA strategy. 2 - Dealers. Considered quite bad in technical and 'ethical' terms. Anybody after an experience with Peugeot dealers runs back to their disliked but not despised Fiat or VW dealer. Learn from Toyta or Hoinda dealers. Somehow they keep customers happy. 3 - Lesson learned from Athos Nobile, aftermarket. Parts are expensive, some are hard to get and your local shadetree mechanic is wary of messing with a PSA product. Learn from Fiat and VW, parts readily and cheaply available. They teach indy mechanics and give them info on the cars. If they don't, PSA might as well pack up and leave. Right now, few would notice.

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- J Mendez on Jul 06, 2012
  
  Oi Marcello, In the case of Mexico it is not exactly the same, here the options on available brands are a little less than in Brasil, we don't have Citröen or Kia for example, The competition on the entry level cars offer very bare bones options for the same price of let's say a 207 (European) which has many safety options available on the other brands on their middle or full equipped options. Unfortunately on the dealership (Stealership) side you are absolutely right. If they were a little smarter they would offer training to independent mechanics as you said, but they keep their secrets like the Coca-Cola formula... Thank Lord for the Internet and Brand clubs. Also about the aftermarket, they should do what MOPAR, Motorcraft etc do... In this case Valeo, Bosch, VDO, Magneti Marelli mostily. I am kinda surprised on the low share in Brazil, at least you guys have a plant in Rio, right? That should (theoretically) make things cheaper, easier to get. Saludos!
  
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- Marcelo de Vasconcellos on Jul 06, 2012
  
  @J Mendez Hola hombre, qué tal? Renault does it better than PSA here. For a compelling price, most of their cars are not completely bare bones, but are very competitive. TO get a Fiat or VW with the same level in terms of equipment as Renault you end up paying more. Peugeot offers less equipment for more price. Citroën plays (or tries) in another league. No cheap Citroëns here. Despite their factory here, they go about it all wrong. Reputation for their parts is high. Look at the craziness, though Peugeot is the 'value' brand and Citroën is more upscale, many time parts are interchangeable. Sometimes you can get a part for your Peugeot at a Citroën dealer and it could well be that it's cheaper at Citroën. A complete contradiction to the market positioning...Mindless! The cars themselves are quite good. Though I see little to recommend a 207, the 3008 is a beautiful thing. Citroën has just launched their DS3. One of few modern cars that generate real desire to own. They also offer the C3 and C3 Picasso which when running and vis-à-vis the competition are decent purchases. The caveat, the support. A leading magazine has just recently completed their 'long-term' test of a 3008 (just 60k km). The car had some problems the dealers couldn't fix during the whole time! It's sad really. But right now, in Brazil at least a PSA product is an 'adveturous' buy. BTW, how's your 3008 treating you? I really want to like this car.
  
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- J Mendez on Jul 06, 2012
  
  @J Mendez Tudo Bem Marcello! The 3008 is fine and running well, we had a few problems related to the timing chain tensor (which affects also the THP engine on the Mini) but now its fine. However the dealership had a very hard time figuring it out. Do you have a link on that long term test made to the 3008? Automóvil Panamericano is now about to finish the same test here. So far they had no problems, and they even took the CUV from Mexico City to NYC (that was adventurous, since in the States you can't get anything for a Pug other than Fuel, oil, water and air for the tires, well, the spark plugs are the same of the Mini at least) and returned to Mexico without any bad news. Abraço!
  
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- Marcelo de Vasconcellos on Jul 06, 2012
  
  @J Mendez Hola de Nuevo J Méndez! You can find the reports on the link below. They will pull the car apart this month and publish it in the magazine next month. Should be interesting. BTW, keep checking the site as usually there is a delay between what they publish in print and on-line. But eventually everything they publish goes on-line. Hummm, their car had no problems with the motor AFAIR. quatrorodas.abril.com.br/blogs/longaduracao/category/peugeot-3008-allure/ Or, snce you know Portuguese just log on to www.quatrorodas.com.br and navigate through the site.
  
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Vent-L-8 on Jul 06, 2012

So long as we are tied up with PSA shouldn't we be getting something out of it? Everyone stop what you are doing and Google Peugeot 508 rxh or the Citroen DS5. This would seem to be the perfecta chiox for what people on this website (me included) seem to lust after. Lets roll the tape: Wagon = check 4 wheel drive = check manual = sort of check diesel = check hybrid diesel actually = check crazy high fuel economy = 57mpg combined city/highway PSA comfort: As an owner of a 1972 Citroen DS-21 Pallas, just take my word for it. This would be the one car that would cause me to break my "no GM ever again, ever" policy. check the review: http://www.thetruthaboutcars.com/2012/05/review-citroen-ds5-hybrid-4/

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