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NEWS
Peugeot slashes models
Money makers only as PSA battles huge losses and fights for survivalMassive financial losses are forcing Peugeot to ruthlessly cut any models from its range not guaranteed to be money makers.
The company has already confirmed there will be no replacement for the 207 Touring (pictured) in the 208 range, the 208 CC hard-top convertible is on-hold and only a five-door version of next year’s new generation 308 small car is guaranteed.
Peugeot is the senior partner in the PSA group, which also includes Citroen, the company that lost $6.5 billion as car sales in recession-hit Europe dived.
It has responded by declaring its intention to become a truly global player, moving upmarket so margins on each car sold are greater, by announcing the closure of its Aulnay plant near Paris with the loss of 8000 jobs, by forging technical and cost sharing ties with Opel, the German arm of General Motors.
And by conducting a forensic inspection of its future model plans.
“We have to make choices and money is a concern and it is an everyday concern on everything we do,” Peugeot Automobiles global marketing and communications director Xavier Crespin told motoring.com.au. “We have to think of what is bringing us quickly the best margins in order to finance our development, because without development we cannot survive.”
Instead of an orthodox 208 Touring, Peugeot is relying on the 2008 mini-SUV to satisfy buyer demand in that class. While small wagon sales are stagnant, compact SUV and cross-over sales are booming in Europe, just as they are in Australia.
The 2008 will be built in France, China and Brazil and Peugeot is aiming for 200,000 sales in 2015 when all three plants are up and running.
“We believe this growing segment is certainly providing us a lot more potential volume and margin and capacity,” he said. “That is why we cannot be everywhere, we have to be sure it is bringing us quick volume and margin.”
Crespin said the design of the 208 CC existed, but the project had been frozen prior to committing the massive investment to test and produce the car.
“If we are tomorrow showing positive figures either growing market share, growing volume and everything it will be the best argument for Maxime Picat the head of Peugeot to fight for a convertible version of the 208.
“If the 208 is still leading the B-segment in Europe plus we have good sales of the GTi and XY versions, it will be the best argument we can have to fight for a convertible version.”
Crespin confirmed that Touring, CC and three-door versions of the next generation 308 were not approved because of the need to build only guaranteed money-makers.
The current 300 Series (also dubbed 308) does not have a three-door, but Peugeot has previously sold a three-door as part of the 300 line-up. It has also made it clear the new car is intended to be a direct competitor for the Volkswagen Golf, which is offered as a three-door.
“There will be no three-door 308. It doesn’t bring enough volume,” said Crespin.
He also used Peugeot’s decision not to sell three-door version of the 308 as proof Australian media reports of plans for a 308 GTi and XY were inaccurate. In the 208 those two models are based on the three-door.
“When you know that GTi and XY are only three-door 208, would it be reasonable to have a GTi or XY on 308?” he asked.
Crespin made it clear the alliance with Opel was the key to PSA’s survival, as it covers off co-development of future models (three have been announced so far), new technologies such as the automatic transmission it is so sorely lacking in small cars such as the 2008 and in slashing costs through buying power.
“This is the survival scenario of PSA,” he said bluntly. “Today I have no alternative to this. We've been working with GM now a long time in order to have it combining and working. I don’t have any information about alternative co-operations that will make PSA survive.”
PSA group also has co-operative agreements with Toyota for the 107/C1/Aygo city car program, has sourced SUVs and electric vehicles from Mitsubishi and has engine programs with Ford and BMW.
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Written byBruce Newton
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