Carlos Tavares, PSA Peugeot Citroen’s incoming CEO announced plans to use €5.27 billion ($7.26 billion) in funds from investors to overhaul the automaker’s lineup. The former Renault executive who will take over as CEO of PSA Peugeot Citroen on March 31 said that the French automaker needs to increase R&D funding and focus on the most profitable vehicles.
“This company has the potential to become a global car company,” Tavares was quoted as saying on Bloomberg during a conference call. He added that his plan is to focus on fewer models and “scare” competitors with the new vehicles in the coming years.
Further details on Tavares’ “Back in the Race” turnaround plan will be offered in mid-April, with the CEO’s objective being to end Peugeot’s loss of competitiveness to Europe’s largest carmaker, VW AG. The German carmaker had a market share of 24.8 percent last year in western Europe, more than double Peugeot’s 11.1 percent.
As part of his strategy, Tavares wants to develop Citroen’s DS sub-brand into a full-fledged marque, but said that may take two decades. He also wants to scale back Peugeot’s lineup in countries such as Russia, where the carmaker currently sells 27 models and is losing money.
An important part of the strategy is related to China, where Peugeot wants to expand with the help of partner Dongfeng. The two companies want to increase joint production by two thirds to 750,000 vehicles by the end of 2015. By 2020, Dongfeng targets 1.5 million in annual deliveries under its own nameplate and the Peugeot and Citroen brands.
By Dan Mihalascu
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