Prevailing wisdom today holds that small cars, manufactured in developed economies are some of the least profitable cars in existence. So why do companies like Peugeot, Citroen and Renault persist in producing them?
Stop us if you’ve heard this one before. Unlike the poorly interpreted plans for Mazda to be a “premium” brand, PSA really is planning to take Peugeot upscale, despite having zero brand equity, an upscale Citroen line and zero exposure to the profit center of the future, low-cost cars.
After approving a $1.6 billion loan guarantee for PSA’s captive finance arm, the European Commission demanded a restructuring plan for all of PSA within six months.
The French government is denying that it plans to acquire a stake in PSA, but France’s Prime Minister told reporters that mechanisms for providing government assistance have already been vetted.
If GM wants to know what will happen when things get tough at its Opel plants, all it has to do is ask partner PSA. Workers at PSA’s doomed Aulnay plant “face jeers and threats, as well as eggs and other objects hurled by striking colleagues protesting against the shutdown and Peugeot’s restructuring plans,” as Reuters reports from the frontlines. (Read More…)
If anyone is hoping for a turn-around of the European car market, be it Opel, PSA, or Pch101, January definitely was not the month it happened. Some people, who get paid a lot of money for a very long-term vision, believe we have to wait years for the turn-around. The French car market dropped 15 percent in January, with “Volkswagen and U.S. carmakers leading the drop,” Reuters reports. Massive sales subsidies of 2,000 euros ($2,700) per car, reintroduced in October in Spain, could not reverse the Spanish market. It dropped 9.6 percent. (Read More…)
What a sexy bride! A year ago, GM acquired seven percent in moribund PSA. A year later, PSA announces truly horrific results. PSA’s global car sales dropped 16.5 percent for the year. Its market share in Europe is down 0.5 points to 12.7 percent. There is a big black hole where there used to be a profitable Iran business. (Read More…)
The French government is pushing PSA Peugeot Citroen to buy Opel, says Le Monde, which claims to have its information from sources at the French Finance Ministry and in the entourage of France’s President Francois Hollande. Buying moribund Opel would allow PSA to stand up to “ogre Volkswagen” which “has chosen to eliminate PSA,” as an informant told the Paris paper.
We did not believe that EU regulators would let France’s government bailout of GM’s alliance partner PSA skate through unchallenged. State aid to companies is against EU rules, and refinancing of Banque PSA Finance is state aid EU Competition Commissioner Joaquin Almunia wrote in a letter to the French government. This according to a report in the French daily Les Echos. (Read More…)
The alliance between GM and PSA is beginning to show concrete results – not just yet, but at least they decided to work on them. In a joint press release, GM and PSA announced that they will jointly work on what they call “three common vehicle platform development projects.” Meaning cars. Finally. (Read More…)
The fate of PSA and the Algerian people has been intertwined for decades. The group’s Aulnay plant, which is due to close, was originally staffed by immigrants from North Africa, lured by the promise of a better life and secure jobs in France. And while Peugeot sales withered in France, the brand has been traditionally strong in North Africa, with 2011 bringing a 93 percent increase in sales for Peugeot.
But Algeria’s push for a domestic car industry doesn’t seem to include PSA. Arch-rival Renault is due to set up a factory in the country, but PSA has apparently rejected overtures from the French government to take a stake in the ailing car maker.
Last week, when talking about Volkswagen’s future $10,00o low-cost car, we said that “is rumored to work on something that costs about half.” Guess it is no longer a rumor. Reuters writes that Gerard Detourbet , the man behind Renault’s Logan program, is in Chennai, India, to work on a real budget car, costing about half of Volkswagen’s targeted price. India is the battlefield for low-cost cars. And that’s not because of Tata’s Nano. (Read More…)
Peugeot will eliminate an additional 1,500 French jobs by 2014, bringing the previously announced 8,000 layoffs close to 10,000, PSA managers told union representatives yesterday. (Read More…)