Renault and Peugeot Share the Same Domestic Market But Not Strategies image

In order to survive Renault and PSA Peugeot Citroen have to increase global production and sales, and make more restructuring in France.

During the first two months of the year auto sales fell 9.5%, with France down an alarmingly 13.5%, where 1 in 10 jobs depends on the auto industry and where the unemployment rate has reached 11%. Although both Renault and Peugeot share the same home market, the share prices for the first automaker have increased almost 40% in the past year, while the second automaker has fallen almost 50%. Therefore investors see Renault as more financially resilient and most likely to turn to profit.

Another advantage for Renault is its partnership with Nissan, made in 1999, but also its cheap Dacia brand and Russia’s AvtoVaz. By contrast, Peugeot didn’t focus on alliances until recently when it announced its deal with GM to share vehicle platforms.

Another difference between the two companies is that Renault, still 15% owned by the government, has chosen not to close any plants in France, only to freeze pay and cut jobs, compared with Peugeot which was hit with criticism when it announced the closing of the Aulnay plant, near Paris. All in all it seems that when the tough times come, it is better to have the government on your side.