PSA Peugeot Citroen's recently appointed chief Carlos Tavares today unveiled the French company's plans for getting back to profitability. Aptly named "Back in the Race", the scheme includes branching out through three brands that can be considered relevant in any market they target and a reduction in the numbers of models offered.
Europe's second largest carmaker has pledged to drop its lineup from the current 45 down to just 26 models by 2022. Tavares explains this will make the remaining models a lot more relevant. Indeed, looking at their current roster of models an abundance of unpopular SUVs and MPVs is obvious.
Tavares also revealed today that the DS badge will be transformed in a third, separate premium brand. The brand was revived five years ago, when Citroen decided to launch a higher-priced small car derived from the C3 to battle the growing popularity of the MINI hatch. Subsequent DS4 and DS5 models proved less successful, but two upcoming models designed specifically for the Chinese market should breath new life into the project.
The first model is a locally assembled and developed luxury sedan called the DS 5LS. It was revealed last year and went on sale in March, with Citroen describing it as a car for fashion-conscious Chinese buyers. At the soon-to-open Beijing Auto Show, the first-ever SUV in the DS range will also be revealed. Previewed last as the Wild Rubis concept, it promises to be spacious and cheaper than offerings from Germans brands that are active in China. Both are built by PSA's local joint venture partner Dongfeng, together with the DS5. Citroen hopes these will be enough to secure a larger share of the premium market and 200,000 sales annualy.
PSA wants to become financially neutral by 2016 or in 2016 at the latest. After that, a 2% profit return on the core business is targeted for 2018. Tavares, who took up the top job at PSA in March, has a tough job ahead of him. Europe's second largest automotive group by volume took a net loss of €7.5 billion ($10.4 billion) in the past two and a half years.
The French stock exchange did not take PSA's plan well. Stocks were down -6.28% in Paris trading as investors digested the profitability outlook. However, Peugeot-Citroen's traded value is up 127% over the last year, reaching approximately €4.5 billion.
Mihnea's favorite cars have already been built, the so-called modern classics from the '80s and '90s. He also loves local car culture from all over the world, so don't be surprised to see him getting excited about weird Japanese imports, low-rider VWs out of Germany, replicas from Russia or LS swaps down in Florida. Full profile
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