As the troubled European carmaker finally unveiled the much-debated capital tie-up deal with China’s Dongfeng and the French state and posted another huge loss for 2013, it also allowed the CEO to be Tavares to expose the turnaround plan.
The announced 3 billion euro ($4.1 billion) cash raising that brings an end to the two centuries of Peugeot family control, new executive leadership and two new big shareholders is seen by upcoming CEO Tavares to have “huge room for improvement”.
“It’s a return to fundamentals,” Tavares said from a podium shared with outgoing CEO Philippe Varin. “Our challenge is to be the best of the Europeans in terms of (our) manufacturing and distribution model, which frankly is not the case today.”
The deal marks the end of an era, as next to Varin, the last dynasty chairman – Thierry Peugeot – will also be stepping down, while, according to Tavares, PSA will have parts sourced more competitively, promote Citroen’s premium DS line into a full standalone brand and stop making some group models to further reduce costs.
“He comes with a very good track record and seems already to have identified clear areas of improvement by benchmarking Peugeot against Renault-Nissan,” said Stuart Pearson, a London-based analyst with Exane BNP Paribas.
The former Number two at Renault, Carlos Tavares also promised PSA would unveil a new mid-term plan in April, and said it would institute measures to reduce the company’s losses in Latin America and Russia.