If you wanted to know what those two Frenchies think about the next chapter in the life of the international auto industry, it was a bit of an effort. PSA Peugeot Citroen was on the Internet at five o’clock in the evening while Renault was on the Internet at … five o’clock in the evening, writes Rob Golding.
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It started well enough with an arrangement that PSA would announce first to the Stock Exchange. I wonder how they did that without falling out?
‘Ello. It eeze Renault ‘ere. We have booked the same day as you to announce our results.
Sacre Bleu, Raynoo. What are you doing on our day? It is for PSA to announce to the world today.
Alors. We must take turns. Apres-vous.
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By GlobalDataMais non. Apres vous, monsieur.
Somehow I doubt it. The rivalry and the jockeying for position is not quiet as fierce as it is for BMW and Mercedes but it is very important that one is not seen to upstage the other.
In the end, PSA kicked off the day with an early announcement in Paris. Renault held back, announced later and made its webcast Q&A a kick-off time of 6pm. Rather than take an early bath, Christian Streiff flew to London and arranged a second webcast Q&A with the London shareholders and analysts at…6pm Paris time. Ooh la la. What is a boy to do? Listen to both at once?
Financially speaking, the results in both cases were reasonably robust considering the state of the market and the intensity of the competition. Streiff spoke of it: “I am beginning to realise the terrible competition in Europe – the amount of capacity, the number of products and all the competitors.”
His figures were a first half rise in operating margin from 2.4% to 2.7%; and in Europe a titchy little market share uplift of 0.2% to 14.2% (second only to VW) in a market down 0.2%. Operating profit was 22% up at EUR842m.
Renault’s equivalent numbers were a surplus of EUR722m for an operating margin up from 2.8% a year ago to 3.5%. It expects to hit a 3% margin for the year. PSA is less certain that it can push on in the second half.
In both cases the two chief executives, who are each in the first full year in charge of their respective French organisations, beat the average of the forecasts in financial circles. It is the recommended way to start a new job.
Streiff started his job with PSA in February having resigned at Airbus. He set up eleven committees of ten people to brainstorm solutions to PSA’s problems. He has come out of it with 150 projects and in describing progress slipped back into aerospeak: “We are working through them for our Project 2010. We need now to get to the right cruise speed and right cruise altitude.”
Listen several times to what Streiff says and you get the impression he is very clear about the key to success. The emphasis points are always the same. Quality first and foremost – something that PSA sacrificed in the past.
Then variety; four derivatives where one might have done. Then retaining successful outgoing models alongside new ones – that has been done with great effect on both Picasso and 206/207. Once all that is done and there is confidence in the products within the organisation – there must be no buying of market share by discounting.
Finally, there must be no neglect of the European market in favour of the development of the badlands. Competitors can and do make most of their profit in Europe and the days of PSA letting European market share slip are over.
Some of us have heard the new boys to the industry say all this before. It will be interesting to see how strong his resolve is when his factories are pumping out shiny new product which deserves a good home, and demand in Europe is down not 0.2% but by 5%.
Then discounting will be left to Renault and PSA will be flying high above it all. Magnifique! Is it a plane or is it a bird? No it’s superman!
Rob Golding
See also: FRANCE: New models boost PSA H1 result
FRANCE: Renault H1 sales fall but margin up
Interview with PSA Peugeot Citroën’s chief executive, Christian Streiff
