PSA Peugeot Citroen chief executive officer Carlos Tavares needed just one year to get the loss making automaker back on track and the once failing company is looking surprisingly optimistic towards the future.
Most importantly, the company that last year was bailed out in a last effort by China’s Dongfeng and the French government in a 3 billion euro move has already reached some of its more demanding goals. Included were the return to profitability for its loss-making automotive division, but PSA’s chief executive officer still believes there’s a long road to recovery ahead. The Back in the Race plan has also seen the automaker concentrate on profits, rather than scale – with group sales still below a three million units threshold. The company has not yet – and Tavares hints it won’t in the near future – committed to a sales figure for 2018 – as is the norm among global carmakers. Tavares said the current strategy for the company revolves around the financial turnaround and once the company is back to solid foundations they will also propose “a volume target, or at least a turnover target.”
The company’s annual global sales volume last year improved by 120,000 units, with the bulk of the growth coming from China – 32 percent increase in sales, over 8 percent in the rejuvenating Europe. The company’s joint venture units in the world’s largest auto market also had a better than expected 7.6 percent operating margin, but the top executive aims to improve that and reach double digit gains in the near future. Additionally, after cutting down the build cost per unit in 2014 by 600 euros – to 730 euros – the group will seek to improve that expense by a further 500 euros by 2018. In order to achieve the target, engineers have been tasked to deliver both better performing platforms, as well as lighter and cheaper architectures.
Via Automotive News Europe