#PSA

PSA Peugeot Citroen will have to delay its plans to sell imported Citroen DS models in China, the Shanghai Securities News said today. According to the paper, Citroen’s existing dealers in China balk at the high cost of building new outlets, which Citroen wants to be located near other luxury brands, such as Infiniti or Jaguar and Land Rover.

Hours later, Reuters reached a PSA spokesperson that had been in hiding earlier in the day.

Europe’s second-largest automotive group PSA Peugeot Citroen is looking at red ink. PSA’s automotive operating loss excluding one-time items was 92 million euros ($121 million), after a 621 million profit the previous year, Reuters says.

When a car company removes itself from Racing, it usually has one of two reasons:

1. The company was luckless on the racecourse and just can’t stomach paying for losing.
2. The company is in dire straits financially, and spending money for frivolous ventures such as car racing just doesn’t look right.

For France’s Peugeot, it’s both.

Sergio Marchionne always had been a proponent of the “the world only has room for six large global automakers” theory. Fiat and Chrysler isn’t necessarily a marriage between two robust partners. Especially in the Asian growth markets, both are weak. According to Italy’s Corriere Della Sera, Marchionne is rekindling a years-old flirt with France’s PSA Peugeot Citroen. Of course, none of the presumably dating companies will confirm the rumor. However, the rumor was started by Sergio Marchionne himself, in Detroit.

Quite ironically, foreign carmakers, namely GM and now French PSA, help China kick-start its ailing export machine.

Everybody had been hysterical about cheap Chinese cars that would soon flood the market, but it didn’t happen. Quite the opposite is happening: Joint venture brands, led by General Motors, are grabbing a larger and larger share of the Chinese market. And foreigners are gearing up to get China a chunk of the world market.

PSA Peugeot Citroen is planning an Opel-sized thinning of its French workforce, Reuters says, citing comments of Jean-Pierre Mercier, union representative at Peugeot’s factory in the Paris suburb of Seine-Saint Denis. The union claims that PSA wants cut 5,000 jobs. And guess who’s to blame?

Now that’s a nice sale: Renault sold 15,600 EVs that don’t even exist yet. In one fell swoop, Renault most likely overdelivered its near term business plan for electric vehicles in Europe. According to Reuters, Renault scooped up most of the 25,000 electric car contract awarded by the French government.

It seems that my recent article on Citroën’s anti-retro retro-inspired car, the DS3, provoked two kinds of reactions: admiration and understanding, but also rejection and some even thought Citroën was simply being cynical in its use of the much storied DS moniker. What was hinted at with the DS3 becomes much more evident in the DS4’s case. With it Citroën may well have stumbled on a modern classic, not to mention a way forward for retro-inspired cars.

Au contraire to VW’s New Beetle, BMW’s Mini, Chrysler’s Pt Cruiser and Fiat’s Cincuecento, Citroën is reviving the fabled DS name as a marque, one that intends to impress on consumers a very Gallic flair for sophistication and elegance. With the launch of the DS3, Citroën is showing a new direction for retro-inspired cars. One that points to the future, while keeping a link to the past of luxury of one of the most intriguing and desirable models in the history of all cars, the DS. Produced in the 60s and 70s, the DS impressed everyone with its different kind of beauty and many a mechanical innovation. Now, it can impress again.

Many equate China with smoke and soot belching cars. In reality, China’s emission and fuel consumption standards now generally follow the European roadmap. Implementation of standards trails the European role model by only a few years. Ironically, it is a European brand that just ran afoul of this misperception – if Chinese media is correctly informed.

France’s PSA wants to get more expensive and cheaper at the same time. PSA plans to up-position their Peugeot and Citroen plans. Probably envious of Renaults success with their Dacia brand, PSA wants to create a completely new low-cost brand, says Automobilwoche [sub].

Now we know why Reuters became confused about Daimler and Renault: It’s those other French forging a bloody alliance with those other Germans as well!

Developing new cars costs a good deal of money. Developing new power trains costs a huge pile of money with unsure payback. So what do you do when you are on the bottom rungs of the Top Ten, or god forbid if you traipse around somewhere in the twenties and if you have neither the money to invest nor the volume to quickly amortize your investment? You find friends to share the burden. This is what PSA and BMW do.

PSA Peugeot-Citroen is feeling its oats again. PSA “remains open to equity alliances with other partner companies in its sector,” PSA CEO Philippe Varin told the Dow Jones newswire. Well, after recent mass weddings that had produced mixed nuptials between Volkswagen and Suzuki, Fiat and Chrysler, and even Renault-Nissan- Daimler threesomes, PSA is looking for a tie-up again. The trouble is: There aren’t many attractive partners left match.com of the international auto business.

Mitsubishi started production of the European-spec model of its i-MiEV electric vehicle Wednesday to maintain its lead over rivals in a non-existing market segment expected to grow rapidly. At the same time, Mitsu started production of the iOn, which is an i-MiEV, rebadged for PSA Peugeot Citroen.

According to The Nikkei [sub], the iOn needed “changes from the Japanese version to meet European safety standards.” Let’s hope that the Euro-spec i-MiEV received the same changes, otherwise it will be DOA.