The Truth About Cars » compressed air hybrid The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 23 Jul 2014 18:25:17 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » compressed air hybrid How Close Are We To A PSA Bailout? Mon, 11 Feb 2013 16:03:28 +0000

It’s safe to say that 2012 was PSA’s annus horriblus. From job cuts to a shaky alliance with GM to bond rating downgrades, everything that could have gone wrong for Peugeot-Citroen ended up happening. And 2013 may not be much better, as the prospect of a bailout looks ever more like reality.

PSA is still faced with the structural problems that dog pretty much every car maker in Europe; a weak economy, rampant overcapacity and a demographic deck stacked against growth in the new car market. Unlike chief rival Renault, PSA has failed to expand its horizons beyond Europe, with little in the way of low cost offerings for emerging markets. On top of that, attempts by PSA at exercising financial prudence, like cutting jobs and closing factories, have been met with outrage in France. A proposed alliance with General Motors has produced little in the way of any tangible results.

The most recent news concerning PSA stems from comments made by French Prime Minister Jean-Marc Ayrault, who denied that there would be a PSA bailout, but admitted that there was a plan in place should the need arise. Technically, there already has been a bailout; back in October, the French government helped arrange a re-financing deal for Banque PSA, the company’s captive lending arm. Since bailing out PSA itself would have been a political nightmare both at home and among the wider EU, a helping hand for Banque PSA was seen as an expedient way to aid PSA.

PSA seemingly kicked off 2013 with a product offensive; an all-new modular platform is said to underpin PSA’s C and D-segment cars, which account for most of their sales, and a new hybrid platform using compressed air promises the usual world-saving spiel that makes dilettante green car fans and government officials go gaga. But these new product plans raised far more questions than they actually solved.

For starters, the new product plans were peculiar in light of the supposed platform sharing and other synergies that GM and PSA touted as benefits of their allance. But that union appears to be as good as dead. While PSA was hoping to leverage GM’s experience in emerging markets like China, GM was apparently looking to use PSA as a dumping ground for its troubled Opel division.

The original GM-PSA platform sharing plans called for a broad range of tie-ups with city cars and compact MPVs, as well as Opel producing PSA’s D-Segment car. Now, PSA will apparently go it alone with a new modular platform called EMP2, which covers the C and D segments, which covers the mid-size and large car, MPV and crossover segments that comprise most of PSA’s range. A modular platform makes sense for Peugeot financially, but it requires a great deal of capital that PSA doesn’t necessarily have.

Even more pie-in-the-sky is the compressed-air-hybrid project. As outlandish as it may be, there appear to be a number of stumbling blocks that make the whole deal look like little more than vaporware. Bosch, PSA’s partner in the compressed air hybrid scheme, noted that “…Unspecified technical challenges have yet to be overcome before a commercial launch…“, despite PSA’s insistence of a 2016 launch date – a relative blip in time in the auto industry.

The answer appears to be lie in the use of these products as a PR pitch for a forthcoming bailout. Industry observers will recall that GM trotted out vehicles like the Volt and the Malibu as justification for its own bailout. In addition, the compressed air hybrid is far less of a moonshot right now than the Volt was in 2008, and PSA’s partnership with Bosch lends the program a certain gravitas. But as it stands, PSA can’t even gain traction with popular products like the 208 B-Segment hatchback – how can they be expected to introduce this kind of technology on such a short timeline?

However, if PSA were to go hat in hand to the French government, they could point to EMP2 and the new compressed air system as evidence that they are well positioned to be competitive in the future. Hybrid sales are up more than 50 percent in Europe, and green issues are still en vogue with a majority of consumers. French President Francois Hollande employs a hybrid Citroen as his official State Car, and the new compressed air hybrid is an important exercise in government relations if PSA is going to get any state assistance. Meanwhile, the first EMP2 product is the Citroen Picasso (above), one of PSA’s few bright spots, and a consistently strong seller in the European MPV segment. Similar to how the Malibu and the Volt represented the here and now and the future for GM, these two will be the emblems of PSA’s immediate recovery and its climb back to relevance in the future. Prototypes of the Picasso have been seen out and about near PSA’s Spanish assembly plants, but the compressed air hybrid isn’t nearly as far along. Rest assured, if it does make it to production, it won’t suffer from anywhere near the same vitriol as the Volt did.


]]> 6