PSA Peugeot Citroen’s hope of a 15m unit Europe market by 2016 to trigger annual production of 1m vehicles, may be “optimistic” says one German analyst.
Earlier this week, the French automaker launched its latest tranche of negotiations with unions to find a way to improve productivity but at the same time smooth sometimes troubled relations with its labour bodies.
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PSA has offered to commit to a 1m annual vehicle volume as well as no factory shutterings, in exchange for wage restraint.
If voted for by the unions, the agreement would see production rise from the current 930,000 vehicles per year to around 1m models in 2016, assuming 15m cars will be sold in Europe by that date.
In return, PSA is asking across-the-board pay increases to be frozen next year, while for 2015 and 2016, rises would be “moderate and defined” depending on progress on the 2015 Rebound plan and financial results.
“[The] 15m units – probably seems a bit too optimistic – the recovery will probably be a very slow one with perhaps a 2%-3% increase – 15m seems optimistic,” Metzler Bank automotive analyst, Juergen Pieper, told just-auto from Germany’s oldest private bank still owned by its founding family.
“For me as an analyst, it is not perfect, but it is not really surprising. It looks like the business is starting to improve just a little. Maybe with this new 308 coming, the market is starting to stabilise a little.
“So perhaps this is a reason to be a bit more friendly towards the unions.”
The plan is only in a fledgling state but at least one moderate PSA union – the CFTC – has cautiously welcomed the automaker’s proposals.
“Each party demands something from the other – everyone has to do their bit,” CFTC union leader Franck Don said. “It is not finished yet – now we have to sign the social plan.”
Earlier this week, Peugeot managing director, Maxime Picat, told just-auto managing editor, Dave Leggett, Europe would not “bounce back towards its 2007 level” the way the US market is.
“The market is starting to stabilise at a low level,” said Picat. “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.”
Further details of PSA’s proposals include a production launch of at least one new model in each assembly plant during the 2014-2016 period and expanding the commitment to maintain these plants in operation beyond the 2016 medium-term plan.
Some EUR1.5bn (US$2.02bn) in capital expenditure has been committed to the French plants from 2014-2016, despite a reduction in overall Group capital expenditure and R&D spend during the same period.
