Tavares-Led Peugeot Gains 5.27 Billion Euro Makeover

Cameron Aubernon
by Cameron Aubernon

Former Renault executive and incoming PSA Peugeot Citroen CEO Carlos Tavares aims to use the 3 billion euro investment made in the three-way pact between the automaker, the French government and Dongfeng as part of a 5.27 billion euro makeover of the automaker’s line of vehicles over the long-term.

Bloomberg reports Tavares is directing Peugeot to use the funds gained from the deal — as well as capital provided by Banco Santander via the automaker’s lending arm — to boost R&D funding, and to focus model expansion on the most profitable units.

Though the plan will focus on fewer models in the present with future works released down the road along the way to becoming “a global car company,” Tavares said his plan will not fix everything immediately; growing the DS line from a subbrand to a full line to compete against Audi, as one case in point, would take the better part of two decades to accomplish.

The plan will also decrease the number of models sold in unprofitable markets such as Russia while expanding into potential goldmines such as China with the help of partner Dongfeng, both of whom aim to move 1.5 million units annually by 2020.

Complete details of the plan — aimed at ending the steady decline experienced by Peugeot in their sales fight with regional leader Volkswagen AG, as well its six-year slide in overall sales in Europe — will be unveiled in mid-April, weeks after Tavares takes the helm from current Peugeot CEO Philippe Varin.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • Onus Onus on Feb 20, 2014

    Leave it to PSA to lose money in Russia while everyone else is making decent cash. Doesn't surprise me, you don't see much of their product around in Russia.

    • Lorenzo Lorenzo on Feb 20, 2014

      Maybe they were latecomers to Russia and had to pay extra bribes to get in?

  • RogerB34 RogerB34 on Feb 20, 2014

    Doesn't matter as investment will not save Peugeot in France. Perhaps the gamble is for China and SE Asia market. The French government in in because they don't want to see factory shutdowns. Early 2013 Hollande warned Peugeot over the labor issue but a warning isn't cash flow.

    • Lorenzo Lorenzo on Feb 21, 2014

      They can always try to get back their market in the former French colonies in Africa. All PSA really needs is an AWD urban assault vehicle and a pickup you can mount a machine gun on. Um, BTW, is TTAC deliberately posting pictures of Carlos Tavares that make him look, er, Germanic?