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Peugeot Citroen in trouble - Trilogy

Taken from Autocar website

Peugeot family could hand control to General Motors Reuters reports PSA-Citroen is rapidly running out of operating capital, meaning drastic action is required <*** class="imagecache imagecache-article_image_480" title="Peugeot family could hand control to General Motors" src="http://images.cdn.autocar.co.uk/sites/autocar.co.uk/files/imagecache/article_image_480/_logo.jpg" alt="Peugeot family could hand control to General Motors" width="480" height="318" /> The Peugeot family, founders of PSA Peugeot Citroen, could step down to let GM run the ailing business
<*** class="imagecache imagecache-personality_thumb" title="Darren Moss" src="http://images.cdn.autocar.co.uk/sites/autocar.co.uk/files/imagecache/personality_thumb/pictures/user-13926-profile_photo.jpg" alt="Darren Moss" width="43" height="43" /> by Darren Moss 27 June 2013 3:11pm

The Peugeot family, founders of PSA Peugeot Citroen, could step back to let GM take over the ailing business. City sources have already warned that PSA could get close to not having enough free cash to run the business by the end of 2013.

A report from news agency Reuters suggests that if GM were to take control of PSA it would want to shut down factories and make redundancies in France and Germany, something the French government is unlikely to let Peugeot family do in its home market.

Peugeot is reported to have sought finance for the business elsewhere, but a lack of willing bidders has forced it to turn to GM, which owns seven per cent of the current business. The move was made with the support of current PSA Chief Executive Phiippe Varin, reports Reuters.

A similar bid to sell a substantial stake to a consortium led by Dongfeng Motor Group has already fallen through.

Overall the Peugeot family owns a 25.4 per cent stake in the company, but controls 38.1 per cent of the voting rights.

Speaking to Reuters, sources close to the ongoing discussions said: “The Peugeot family has now accepted that they'll lose control.

“PSA will need to present a new industrial plan for people to underwrite a capital increase, and the only hope is GM. They (GM) are ready to inject more money if they can control the business, integrate Peugeot and Opel and rationalize production.” Peugeot, which is heavily reliant on sales in its home territory, is fighting for survival according to the report.

GM bought 7 per cent of PSA in February 2012. Since then, the French Government stepped in with financial aid for Peugeot's own bank, ensuring it could still offer competitive finance to new car buyers.

The deal now hinges on GM. Sources say GM bosses need assurances that they would be able to cut plants and jobs “at reasonable cost.”

Widespread cuts in France, which would be almost certain under GM control, would be fiercely resisted by President Hollande's government. However, the French Government is said to understand that in order to return to profit Peugeot either needs to seek a larger tie-in with GM, or seek a similar deal with another industry partner. Peugeot, which employs 77,000 workers in France, has already mothballed its production plan in Aulnay and is scaling down production elsewhere.

Autocar noted last year that in bailing out PSA, the French government might have harmed long-term deal prospects.

Neither Peugeot nor GM has commented on the story.

Edited by Trilogy on 27/06/2013 at 23:04

Peugeot Citroen in trouble - unthrottled

That's what happens when you decide that your core market is beneath you. The 406 was a good staple car. PSA's move to dissociate itself from mini cabs was painfully obvious. Skoda welcomed Peugeot's former customers and the new clientele did not arrive.

Citroen's recent efforts look like ever increasingly desperate entries for the Turner prize.

Peugeot Citroen in trouble - Avant

Again many thanks, Trilogy, for finding this and sharing it with us.

I think PSA are very dependent on the home market which has always been very patriotic. Over here it's difficult to see what Peugeot's USPs are, and even though Citroen's DS series has kept the quirky reputation going, the 'magic carpet' ride is no more (I've no idea why they stiffened their suspensions).

In the 80s and 90s Peugeots and Citroens, in different ways, were famous for their ride/handling compromise. If one were to ask what they are famous for now, someone would probably say 'breakdowns'.

Peugeot Citroen in trouble - Sofa Spud

If General Motors takes over Peugeot, I wonder if they'll just badge-engineer Vauxhall / Opel models with a lion on the grille.

Edited by Sofa Spud on 27/06/2013 at 23:42

Peugeot Citroen in trouble - tony g
Have GM sufficient financial clout to take on Peugeot citroen ?. It's only two years ago that GM were debating which of there European factories would close.
Peugeot Citroen in trouble - RT

Opel/Vauxhall still has a problem with over capacity - GM itself has an identity crisis about which of it's many brands to use where - Opel/Vauxhall is rolling out a new generation of petrol and diesel engines to replace older designs - so why on earth does GM want more factories, more brands and more older engine designs ?

Peugeot Citroen in trouble - dieseldogg

To gain PSA diesel engine technology I guess.

Peugeot Citroen in trouble - RT

To gain PSA diesel engine technology I guess.

But GM have spent billions developing new engine ranges, which are just starting to be rolled out to replace their use of Isuzu, VM Motori and Fiat designs.

Anyway, Ford have a joint deal with PSA - that surely must exclude GM !

Peugeot Citroen in trouble - TeeCee

In the 80s and 90s Peugeots and Citroens, in different ways, were famous for their ride/handling compromise. If one were to ask what they are famous for now, someone would probably say 'breakdowns'.

Er, French cars have been famous for dreadful reliability since I were a small lad. If anything they're rather better in that regard these days than they were in the past.

The answer to the "stiffer suspension" question can be seen in Citroen's original ad for the current C5, trying to pitch it as a "German" car. They really missed the point here, it's the reliability that they were lacking in comparison to the Germans, the ride and style was the one thing that people liked about French vehicles.

All they've managed to prove is that there actually isn't a market for a less reliable BMW or Audi.....

Peugeot Citroen in trouble - Sofa Spud

QUOTE:...""Er, French cars have been famous for dreadful reliability since I were a small lad.""

QUOTE:..""All they've managed to prove is that there actually isn't a market for a less reliable BMW or Audi.....""

They've also managed to prove that British Leyland standards of quality control don't necessarily lead to financial ruin.

Peugeot Citroen in trouble - RT
They've also managed to prove that British Leyland standards of quality control don't necessarily lead to financial ruin.

..... under French protectionist politics

Peugeot Citroen in trouble - Andrew-T

As a Pug devotee of about 25 years standing (and sitting) I am not very surprised if PSA is in difficulty. In a world of carmaking overcapacity it must be hard to turn a profit from a base in the EU, compared with companies rooted in the Far East or Central Europe.

But it is odd that whenever PSA is discussed, the gang of diehards resurfaces moaning about the unreliability of its products. Stats show that they aren't the best, but I have owned or used about 20 examples over the years without a serious problem, and with a good deal of enjoyment. I don't claim to be a particularly clever buyer of cars, but that looks like more than just luck. I also harmonise with their design philosophy - or at least I did through the 1990's. I'm not sure what happened after that ...

Peugeot Citroen in trouble - madf

No way will GM merge or buy PSA- the issues they have had with Opel and FIAT ensure that. And with their own overcapacity, it would be madness.

PSA exist to serve the French market and remind us how poor French car makers are. Period.

There is 20% overcapacity in Europe - None in VAG/BMW /Mercedes or in the UK oustide Vauxhall. It's all in France and Italy.

The French are going to have to face reality - but I don't expect it will happen soon.

Peugeot Citroen in trouble - RT
There is 20% overcapacity in Europe - None in VAG/BMW /Mercedes or in the UK outside Vauxhall. It's all in France and Italy.

Add Germany and Spain in GM's case.

Peugeot Citroen in trouble - Engineer Andy

GM would be daft to go in with them, especially after their experiences with Saab - a French subsidary being told to be boring and just rebadge a Vauxhall/Opel - yeah right!

Sadly I think PSA's woes are symptomatic of a much wider problem in the whole of France, which doesn't look like improving any time soon.

Peugeot Citroen in trouble - gordonbennet

Agree with Unthrottleds post above.

PSA used to make some decent cars, indeed there are still rust free 405 and Xantia Diesels out earning their crust, they might look a bit old fashioned now but they were decent enough in their day and have proved durable in the extreme and as comfy as your old slippers to ride our battered third world urban roadscapes.

Apart from Berlingo and the rest of the very decent van/combi range i wonder what the thinking was, Pugs offerings especially are as ugly as sin, who one earth authorised that wide gaping mouth grill or the revolutionary army personell carrier lookalike that is 3008/5008, dear Lord you couldn't pay me to own one.

PSA not the only ones to have ignored indeed spurned their core customers, Honda did exactly the same by beating Civic and Accord with the ugly stick, why? the shapes might appeal to few fickle younger buyers but those regular reliable every three year mature buyers vanished without trace, Jazz is about the nicest looking car they now make.

Peugeot Citroen in trouble - barney100

In 25 years you have has 20 Pugs, thats alot of car changing!

Peugeot Citroen in trouble - Trilogy

Peugeot 205 is one of the all time greats and Citroen have made a plethora of great cars. Sadly none in their current ranges stand out. Peugeots have become so ugly. Why would you buy one?

Peugeot Citroen in trouble - madf

Peugeot 205 is one of the all time greats and Citroen have made a plethora of great cars. Sadly none in their current ranges stand out. Peugeots have become so ugly. Why would you buy one?

Inertia: you buy a Pug cos you have no imagination.

Peugeot Citroen in trouble - Trilogy

Inertia: you buy a Pug cos you have no imagination.

Just like people who buy Audis. Audi owners update their cars for another one. No one can tell the difference.

Peugeot Citroen in trouble - Auristocrat

In 25 years you have has 20 Pugs, thats alot of car changing!

The phrase was 'owned or used' - which may include company cars, hire cars, etc.

Peugeot Citroen in trouble - Andrew-T

In 25 years you have has 20 Pugs, thats alot of car changing!

The phrase was 'owned or used' - which may include company cars, hire cars, etc.

Indeed, tho I can recall only one company car, a 309. It includes 205s, a 106 and a 206 owned by my daughters, and my wife's Dturbo. Three 306 hatchbacks and a cabrio, plus four 205 cabrios and several hatchbacks, a 206 and the current 207. Not many at once; but there are three Pugs outside as I speak, with a total age of 50 years.

Not many Pug dealers have benefited from this spending spree as I only buy used :-)

Edited by Andrew-T on 29/06/2013 at 16:14

Peugeot Citroen in trouble - RT

Regardless of the merits of historical Citroens and Peugeots, PSA has nothing to offer GM - they've just started rolling out new engine families, petrol and diesel, to replace the wide variety they've used over the past few decades including Peugeot at one point. PSA don't have any models or platforms that might benefit GM and there's plenty of Opel/Vauxhall dealers so no point taking those.

The whole thing sounds to me like the Peugeot family realise the end is nigh and they want out, for obvious reasons. Best thing would be for the French to nationaise it.

Peugeot Citroen in trouble - daveyK_UK

I will say one thing for Peugeot/Citroen, the Berlingo/Parnter and the car versions (multispace/tepee) are cracking vehicles, and have proven to be more reliable than the fiat doblo, vauxhall combo, ford tourneo/transit, renault kangoo, etc.

One thing Peugeot and Citroen have felt the affects from is Dacia who are drastically undercutting them while using proven reliable french technology from Renault.

And yes I wrote reliable! Dacia generally only use the old tried and tested stuff.

They have adopted the 0.9l, 3 cilinder petrol which is relativly young, and they do use the same 1.5 diesel you find in most renaults, nissans and the A-class BUT it does have wider injectors and a different filter to allow it to take more of a beating from poor quality fuel with the effect being lower MPG figures on the official consumption tests.

Edited by daveyK_UK on 30/06/2013 at 22:59

Peugeot Citroen in trouble - unthrottled

proven reliable french technology from Renault.

Renault engines are reliable. Its the series production quality control that was the problem.

Peugeot Citroen in trouble - RT

There's nothing wrong with Renault quality at Dacia prices !!

Peugeot Citroen in trouble - JOGON

And so they should be - France has always been protective of it's home-made car industry whether good or bad.

Our appalling Peugeot 104 was, quite literally, nothing but TROUBLE.

Worst car we've ever mistakenly owned.

Peugeot UK & the dealers displayed dull indifference.

Replaced by excellent Hyundai i10 two years ago. Hassle free motoring.

Peugeot Citroen in trouble - gordonbennet

Our appalling Peugeot 104 was, quite literally, nothing but TROUBLE.

Replaced by excellent Hyundai i10 two years ago. Hassle free motoring.

Good grief man it can't have done so bad, must have been 25 years old when replaced by the Hyundai...:-)

Peugeot Citroen in trouble - Sofa Spud

QUOTE:...""...Best thing would be for the French to nationaise it.""

And then sell it to Airbus Industries, who in turn sell it to BMW, who after a few years sell it to a management buyout who run it into the ground. Then a Chinese company buys up the assets with a plan to produce mildly facelifted former Peugeot models under the brand name of 'Pyoioy' !!!!!!

Edited by Sofa Spud on 01/07/2013 at 11:47

Peugeot Citroen in trouble - gordonbennet

QUOTE:...""...Best thing would be for the French to nationaise it.""

And then sell it to Airbus Industries, who in turn sell it to BMW, who after a few years sell it to a management buyout who run it into the ground.

Having taken the name and the factories they were after, kerching.

GB PLC, the worlds laughing stock, both barrels constantly primed ready to shoot ones own foot off at the drop of a hat.

Peugeot Citroen in trouble - Bromptonaut

And so they should be - France has always been protective of it's home-made car industry whether good or bad.

Our appalling Peugeot 104 was, quite literally, nothing but TROUBLE.

Worst car we've ever mistakenly owned.

Peugeot UK & the dealers displayed dull indifference.

Replaced by excellent Hyundai i10 two years ago. Hassle free motoring.

Do you mean a 104? They ceased production about the time the 205 came out so c1984.

I owned one, a ZS on an S suffix, from 1982 until 86. When it went it was brilliant but prone to lunching it head gasket, an engine out job at £300 plus thirty years ago