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Plotting a Return: PSA Peugeot Citroen Wants Back into the US

Unusual approach would start with car-sharing and mobility programs.

by on Apr.06, 2016

PSA CEO Carlos Tavares previously spent time in the U.S. running Nissan's American operations.

A quarter-century after it abandoned the American market, much to its later regret, France’s PSA Peugeot Citroen is planning its return, according to the maker’s CEO.

But rather than simply opening up a new dealer network, a strategy has had marginal benefits for Fiat, the Italian maker that also quite the U.S. market, PSA is looking at alternatives that could include using mobility and car-sharing programs to establish an American presence, suggested Chief Executive Carlos Tavares, during a presentation to analysts and investors.

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The former second-in-command at French rival Renault, Tavares has been credited with orchestrating an unexpected turnaround at PSA. It is now generating its strongest profits since the turn of the millennium, notes Automotive News, after nearly plunging into bankruptcy just two years ago.

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Peugeot 308 Wins European Car of the Year

BMW i3, Tesla Model S end up runners-up.

by on Mar.04, 2014

The Peugeot 308 beat out two battery electrics and Mercedes most technologically advanced vehicle to capture Car of the Year honors in Geneva.

It might not be the silver lining the struggling French automaker has been desperately seeking, but Peugeot officials were clearly pleased to learn they landed the much-coveted European Car of the Year title for their little 308 model.

The compact hatchback triumphed over some tough competition that included a pair of well-reviewed new battery cars, as well as the most sophisticated full-sized luxury sedan ever offered by Mercedes-Benz.

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It’s been a tough few years for the largest of the French automakers, PSA Peugeot Citroen only last month forced to sell a major chunk of its stock to Chinese partner Dongfeng, an equal share to the French government – effectively ending more than a century of control by the Peugeot family. That move was forced by the company’s continuing losses and the rising fear of collapse. (more…)

French Automaker Peugeot Receives Chinese Bailout

Family reduces stake to secure Dongfeng’s investment.

by on Feb.19, 2014

Peugeot and Dongfeng inked a $1.1 billion deal giving the French automaker a much-needed infusion of cash.

Struggling French automaker Peugeot is receiving a helping hand from halfway around the world with Chinese investor Dongfeng investing 800 million Euros, or $1.1 billion, in the European firm.

It’s a critical step for PSA Peugeot Citroen, which has been facing increasing problems – and mounting losses – in the face of Europe’s worst economic crisis in decades. There have been concerns Peugeot might not be able to survive without outside help, a situation that has led the heirs to the Peugeot family to sharply reduce their stake in the maker in return for Dongfeng’s help.

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In turn, Dongfeng gets to bolster its position in its home market – now the largest automotive market in the world – gain access to much-needed technology, and potentially put it in a position where it could expand beyond China’s borders. A number of Chinese makers have been hoping to expand into Europe and North America but so far have faced numerous obstacles along the way. (more…)

Former Renault/Nissan Star Carlos Tavares Lands Peugeot’s Top Job

Faces major challenges at floundering French automaker.

by on Nov.27, 2013

Carlos Tavares, seen during his years at Renault/Nissan with a Nissan Leaf battery car.

Less than three months after falling from grace as the likely successor to Renault/Nissan Alliance CEO Carlos Ghosn, Carlos Tavares has resurfaced – and he won’t have to move very far, taking on a new assignment as the CEO of the troubled PSA Peugeot Citroen.

Considered one of the global auto industry’s rising stars, the 55-year-old Tavares had a potentially career-ruining flame-out in August when he announced during an interview that he’d like to leave his job as chief operating officer of Renault for a job as CEO of one of Detroit’s Big Three makers.  That didn’t sit well with his then-boss Ghosn who quickly gave Tavares his walking papers.

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Exactly why Tavares spoke out was unclear.  So was the potential fallout, some observers wondering if the Portugese-born executive was simply letting the world know he wanted a better job – others warned that Tavares might have made himself untouchable.  But it turns out his timing was close to perfect and his method far from madness.

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Troubled Peugeot Selling 30% Stake to Chinese Partner

Move could short-circuit French maker’s alliance with GM.

by on Oct.09, 2013

Peugeot's next 508 could have a much more significant Chinese influence if a proposed deal with Dongfeng goes through.

Floundering French automaker PSA Peugeot-Citroen may soon be getting a new accent, reports from China suggesting one of the booming Asian nation’s larger domestic manufacturers, Dongfeng Motor, is set to purchase a 30% stake in Peugeot for about $1.6 billion.

But the proposed deal could create some problems on a global scale.  Among other things, it might short-circuit the relationship Peugeot has already established with General Motors. And it could prove problematic considering Dongfeng is already partnered with the French maker’s rival, the Renault-Nissan alliance.

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PSA Peugeot-Citroen has been one of the automotive manufacturers hardest hit by the ongoing European recession.  It lost more than $6.5 billion last year and remains deep in the red for at least the first half of 2013.  The maker has already said it will close one key plant in an effort to cope with worsening capacity utilization issues – despite strong resistance from the French government.

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Peugeot Looks to GM as Potential White Knight

GM plays hard-to-get after past alliances all floundered.

by on Jun.28, 2013

Despite the addition of new products like the 3008 diesel-hybrid, Peugeot continues to stumble as the European slump drags on.

After more than 200 years in control of the company that still bears its name, the Peugeot family appears willing to cede control of PSA Peugeot Citroen in a bid to attract a white knight to rescue the fast-failing French automaker.

And with several potential partners, including Chinese carmaker Dongfeng, showing a notable lack of interest, Peugeot CEO Philippe Varin is now sounding out General Motors, according to several reports from Europe.  GM and Peugeot announced an alliance in early 2012 that the makers claimed would save them billions of dollars over the coming year through common purchasing, parts production and other efforts. But the proposal coming from the French maker would take things a significant step further.

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Like Peugeot, GM has been hard hit by the European economic crisis and recently announced the latest in a series of turnaround plans for its Continental operations – which have lost more than $16 billion in 13 consecutive years of red ink – including $1.8 billion in 2012. But with European car sales now dipping to their lowest levels in two decades, analysts are skeptical about how quickly it will be able to implement that plan.

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Peugeot Drops $6.7 Bil for 2012

Debacle raises new concerns about alliance with GM.

by on Feb.13, 2013

Peugeot's Onyx Concept at the Paris Motor Show. The maker is hoping to rebuild demand with new product.

Hammered by plunging sales and massive excess capacity, struggling PSA Peugeot Citroen has revealed it lost €5.01 billion, or $6.74 billion, last year raising further concerns about its long-term health – and about the viability of a partnership the French automaker has formed with General Motors aimed at turning around both of their troubled European operations.

The heavy loss – compared with a €588 million profit for 2011 — is compounding concerns that the French government might move to take a stake in Peugeot, the country’s dominant automaker. The new Socialist administration is already on the hook for a €7 billion guarantee it approved last year for the car company’s financial services arm.

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European car sales have continued plunging as Continental bureaucrats struggle to solve a nagging financial crisis, hitting their lowest level since 1995 last year. Most makers have taken a hit, some slipping deeply into the red, but none as sharply as Peugeot.  Compounding the maker’s problems has been a significant increase in steel and other raw materials and components.

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French Government Bails Out Peugeot

Move could threaten maker’s alliance with GM.

by on Oct.24, 2012

The Peugeot Onyx Concept at the Paris Motor Show.

With Europe’s automotive crisis worsening, the French government has prepared a bailout plans for PSA Peugeot Citroen. The plan to aid Europe’s second largest automaker revolves around a government-backed refinancing deal for the company’s lending arm.

The deal is creating significant controversy among both the French public and within the Socialist government elected earlier this year, some members of the cabinet of President Francois Hollande threatening to walk out over the move.

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“Banque PSA is now government-backed,” London-based Credit Suisse analyst David Arnold told Reuters. “It’s becoming increasingly obvious that selling assets won’t stem the cash outflow.”

Peugeot’s financial position has continued to deteriorate as car sales in western and southern Europe have collapsed, sending the maker’s stock to historic lows.

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New French Pres. Rips Peugeot Bailout Plan

Potential problem for partner GM?

by on Jul.16, 2012

New French Pres. Hollande says "Non!" to Peugeot's plan to close an excess plant.

French President Francois Hollande wasted no time ripping into PSA Peugot Citroen’s plans to close a major assembly plant north of Paris as part of a turnaround plan expected to be used in seeking a government bailout of the ailing automaker.

The new leader, who took the Socialist Party back into power, took a distinctly different position from industry analysts and press pundits.  With rare exception, they had immediately hailed Peugot’s announcement last week as the long-awaited start of the restructuring of the European auto industry.

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The Continent has seen a four-year slide in automotive sales and though there is near universal agreement that Europe has far too much production capacity manufacturers have, until now, been unwilling to make the first cuts.

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PSA Peugeot Citroen Reportedly Seeking Government Bailout

Meltdown at French automaker spells problems for partner General Motors.

by on Jul.10, 2012

The Peugeot HR1 battery car concept. Peugeot itself now needs a charge-up.

Growing increasingly desperate after watching another 13% sales drop last month, inside leaks suggest French automaker PSA Peugeot Citroen is looking for a bailout from the French government.

The troubled automaker denies the reports, however, this could be the first step in the negotiation process between Peugeot executives and the new French government, which appears highly unlikely to let the company flounder as the European recession spreads and eats into the automotive business across the continent.

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The reports also illustrate the underlying weakness of General Motors plans for fixing Opel, which leans heavily on forging a PSA-Opel alliance.

GM paid $400 million for a 7% stake in Peugeot earlier this year and is already turning to PSA for assistance in repairing its floundering European operations, which are steadily losing market share and piling up red ink. The losses at Opel are now expected to color GM’s second quarter earnings report, which is due August 2.

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