INTERVIEW: Maxime Picat, Managing Director, Peugeot
Peugeot is a brand that is part of a group, PSA, being squeezed in Europe's depressed car market. However, Maxime Picat sees positives for the future based on the company's re-alignment to the needs of growing emerging markets, the Peugeot brand's repositioning based on revitalised products and understanding changing needs in mature markets.
DL: A big problem for your business right now is the depleted European car market. How are you dealing with that?
MP: We need to be strong inside Europe and outside Europe. Inside Europe it is not very easy. But we are increasing our sales outside of Europe. In China we are gaining market share. In Argentina we are gaining market share. In Algeria – the second largest market in Africa – we are gaining market share. So we are gaining market share in fast-growing markets outside of Europe.
Our internationalisation plan is on track. We are now selling 45% of our vehicles outside Europe against 25% a year ago. As our home markets stagnate, we need to concentrate more on emerging and growing markets.
In Europe, a key thing is for us to move upmarket and we believe that we are doing that with the new models that we have and the [higher specification] variants that we are increasingly attracting our customers to. At the same time we have to reduce our costs – which is why we decided to take the difficult decision to close a factory in France – and to keep on improving our competitive position. And that's why we are talking with the unions, to take the right steps to improve our competitivity.
We have lost some market share in Europe but that is mainly in non-profitable areas like short-term rental fleets; we are gaining share to private retail customers. We have to maintain market share, do well in profitable channels and move upmarket wherever we can to get higher margins.
DL: And the European car market outlook?
MP: Europe will not bounce back towards its 2007 level the way the US market is. The market is starting to stabilise at a low level. We might see some market growth in 2014, but the most important question is not when, but how fast the growth will be in the recovery. Our view of Europe is that it might be slow.
DL: You spent some time in China managing a joint venture – DPCA - there. How do you see things there?
MP: Still very positive. In China now we have new, younger customers who are still excited about cars, while in Europe it's all about being connected while you are in the car.
In China, when I arrived in 2007 there were 178,000 Peugeot and Citroens sold in the market. This year it will be around 550,000 cars, so it's been growing very fast and there is still a big appetite for cars in emerging markets like China. There is still huge potential for the coming decades in China where the car is still an object that people desire and aspire to own...but for Europe that is changing.
DL: And long-term in Europe? How do you see the needs of the market changing?
MP: We need to offer full solutions of mobility for changed attitudes, to serve our customers' needs as they evolve. Owning a car is not the first dream of the 18-year-old in Europe these days. They first would like a smartphone and then maybe a flat and then maybe a car, but it's not the first thing on their list the way it was. The relationship between society, especially the young generation and cars is changing and we have to follow that. We have a chance as the Peugeot brand to offer not only cars, but also scooters and bicycles. We have to be pioneers in providing solutions of mobility to our future customer.
Maxime Picat, civil engineering graduate from the Ecole des Mines Paris, joined the PSA Group in 1998. He has a broad industrial experience; after various jobs in manufacturing in Mulhouse, he became manufacturing manager at the Group's Sochaux plant before being appointed as Managing Director for the manufacturing facility of Wuhan in November 2007.
Maxime Picat was appointed Managing Director of DongFeng Peugeot Citroën Automobiles (DPCA) in January 2011, having previously held the post of deputy Managing Director between August 2008 and January 2011.
He was appointed Managing Director for the Peugeot Brand from the 1st October 2012.