PSA Peugeot Citroen says its announcement today (5 April) of a major ramp up in product launches will entail a “significant” increase in demands on its supply chain.
The manufacturer will launch new products across its three Group brands, Peugeot, Citroen and DS, including 26 passenger cars and eight light commercial vehicles, which will feature a 1t pick-up truck.
The company adds it will also launch seven plug-in hybrids and four electric vehicles, as well as deploy a connected and autonomous vehicle programme.
“It is a significant amount of work,” PSA EVP Industry & Supply Chain, Yann Vincent told just-auto on the sidelines of this morning’s new product initiative in Paris. “What we are trying to achieve is the lowest total landing cost. I would say we are obviously trying to buy at the most competitive price.
“It has to do with where you localise your suppliers. What we are trying to achieve is the lowest total landing cost. I would say that is the most important challenge for us, being able to reduce as much as possible [cost], not only in Europe, but in other regions.
“For some of these regions, we have to increase the localisation ratio – [we also] still have room for improving our internal logistical efficiency.”
PSA noted it was possible it could source a raw material such as steel outside its home market, but any other suppliers would have to adhere to a strict quality policy.
The issue of raw materials is of particular relevance in the burgeoning UK car market at present with the possibility of Tata Steel pulling out of the country leading to potentially tens of thousands of redundancies in the supply chain, but PSA appears to be sticking close to home for its body material.
“What we are considering is the total landed cost of raw materials,” added Vincent. “What we are buying has to stick to our technical specifications. With regard to steel, our demand is pretty high and not all suppliers are capable, but we might source outside France.
“We have to recognise as well the shipping costs of sheet metal.”
PSA’s new plan envisages revenue growth of 10% by 2018, compared to 2015 and an additional 15% increase by 2021.