PSA Peugeot Citroen is maintaining a bullish outlook for this year despite posting 2009 sales on Monday down 2.2% year on year.
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The group was keen to position its performance against a backdrop of falling global car sales that saw Europe, for example, contract 5.4%, while sales in Russia plummeted an alarming 50.1%, though PSA was not alone amongst western automakers who have ventured there.
European gloom was alleviated by the introduction of government-backed vehicle scrappage schemes in 13 countries that saw sales rise 13.1% in the fourth quarter of 2009, compared to a sharp fall of 19.5% in the first.
However, even this good news looked likely to be tempered by the reality of scrappage schemes themselves being ditched as cash-strapped governments look to rein in expenditure. PSA estimated this could lead to a one-digit decline in European demand.
In order to address the European shortfall and cope with the challenging global environment, PSA is implementing a range of measures to streamline its operational efficiency.
“We have had planned [reductions] and [are] refining plant production levels, maybe going from three to two lines,” said a PSA spokesman. “We will have, for example, high-volume lines and, when there is less demand, we will adjust our production techniques.”
The spokesman was coy about what tweaks would be put in place to “adjust our production techniques”, but stressed the need to address the company’s cost base allied to improved efficiency.
“European shortfall is likely to be taken up with growth in other markets,” he added. “Scrappage in the UK for example, has fallen from 12,000 to 8,000 [units] per month.
“We will have to be more reactive – that reactivity is increasingly important to us.”
A further element of the cost equation to which PSA is keenly devoting itself is that of the supplier relationship. “We are working with suppliers to make sure they understand where we are going,” added the PSA spokesman.
“We have a team of 40 people in Paris working with our top 80 suppliers to make sure they understand where we are going as a group.”
Specific models that are addressing disappointing sales in depressed markets include the 206+, which has proved particularly successful in scrappage schemes. And models such as the recently-launched 5008, not typically considered to be in scrappage territory, have exceeded expectations. “Those cars that are almost devoid of scrappage have been doing very well,” added the PSA spokesman.
Successes include the Citroën C3 Picasso, which exceeded forecasts at 86,000 units sold, while Peugeot’s first crossover, the 3008, sold more than 59,000 units.
There are markets of course to which PSA – along with a plethora of its rivals – is turning its attention, notably China and Brazil, key players in the so-called BRIC economies.
The Chinese market grew by a significant 47% last year, while PSA Group vehicle sales rose 52% to 272,000 units, driven by the recent launch of models such as the Peugeot 207 hatchback and sedan, as well as the Citroen C-Quatre and C-Elysee.
And PSA is pleased with its performance in Brazil with sales up 12.5% pointing the way to recovery – although the rest of Latin America is proving particularly problematic.
The one BRIC market that has performed woefully, however, is Russia where PSA sales plunged 50% in line with the overall market. Only last year, PSA chairman Philippe Varin was reported as saying he wanted the automaker to increase its share from 3% to 10%.
“Like everybody else they [Russia] are feeling it,” added the spokesman. “The market has grown a little in the past, but the recession has been very, very difficult.”
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