PSA unveils five-year model blitz for Peugeot, Citroen and DS

The new vehicles will be based on one of two ‘multi-energy’ platforms and there will be seven plug-in hybrid models and four new battery-electric vehicles in the PSA line-up by 2021.

Tavares also briefly referred to the launch of a “electric four-wheel drive upper market vehicle” but gave no more details.

Increased profit margins targeted

Under the new financial targets, the company wants to see 4% profit margins for the next two years, before hitting 6% in 2021. In stark contrast, Tavares revealed that PSA’s profit margins between 2001 and 2015 had averaged just 1% per year.

Overall revenue for PSA also grew at snail’s pace, with an average of just 0.8% between 2001 and 2015. Tavares says the new target is growth of 3.2% between 2016 and 2018 and an average yearly revenue growth of 4.4% between 2019 and 2021.

New mission statements for brands

The groups three automotive brands have all been given targets and new mission statements. Peugeot is tasked with becoming the “best high end generalist brand” - or a direct VW rival. The company also wants to have 700,000 Peugeot customers connected to the brand via the web and to see further improvements in the brand’s pricing power.

Today, the average Peugeot is sold for around 2.4% less than an equivalent VW model. By 2018 that gap should drop to 1.3%, before overtaking VW by 0.5% by 2021. Tavares also revealed that “25% of profits” on the Peugeot 308 line come from sales of the upmarket GT and GTI models.

Citroën is aiming for sales growth of 30% by 2021, pushed by 12 new models rolled out globally, of which seven will arrive by 2018. It will become a “people-minded brand” under the heading “be different, feel good”. Citroën will offer a “fair pricing” and a “hassle-free relationship” with the brand.

Finally, the DS brand will offer “French avant garde luxury” and five new models will be rolled out globally as part of the “continued brand construction”. Like Peugeot, DS management is looking to reduce the pricing gap with established premium auto brands. Today, average selling prices are at nearly 8% lower and DS wants to reduce the gap to 3% lower than rivals by 2021.

PSA's global ambitions

The overall aim for PSA in Europe is to be the number one in non-premium brands for profitability and number two for market share, Tavares said.

In the wider world, PSA is looking to establish “new industrial footprints” in Iran, Algeria and Morocco and to hit 700,000 sales annual across the Middle East and Africa by 2021, with 70% of that output made locally.

In the India-Pacific region, Tavares said that PSA would enter a “partnership deal” to get into the Indian market, though there wouldn’t be any product launches until 2021. Although he gave no clues as to who PSA would tie up with, it has been rumoured that Tata, owner of Jaguar Land Rover, was a leading contender.

In Eurasia - the economically troubled area that includes Russia - the company wants to get back to break-even by “2017 at the latest”.

In China and South East Asia, PSA is aiming for a million sales by 2018, a 10% profit margin thanks to 20 product launches, which will include three plug-in hybrid models and two battery electric vehicles.

Manufacturing efficiency to improve

Improving the company’s overall manufacturing efficiency is also part of the ‘Push To Pass’ plan. PSA will slash 1.5bn euros from its research and development and capital expenditure costs between 2014 and 2018 and is aiming to improve its productivity by 5% per year between 2019 and 2021.

A significant 700 euros (perhaps more than 5%) will be cut from the average cost of manufacturing a vehicle in 2018 compared with the cost in 2015. PSA’s manufacturing efficiency should be also be boosted by 20% by 2018 compared with the 2015 benchmark.

PSA also wants to have a bigger share in aftermarket sales, using three different providers. As well as the dealer network, it wants to expand the more value oriented Euro Repair network and grow the revenue of the Mister Auto parts retailer by 500% by 2021.