PSA Peugeot Citroen is France's biggest carmaker, and the #2 across Europe. However, PSA's traditional focus on its home market, as well as recurrent financial problems since the 1980s have caused it to be overshadowed by domestic rival Renault. PSA has attempted to kickstart international expansion through aggressive moves into Asia, Latin America and the Middle East, but sales have remained doggedly flat for several years, hampered by a lack of new launches. A new management team was installed at the end of 2006 to break the group out of its rut, but the downturn in the economy did not help recovery, and the group announced an unexpected loss for 2008, resulting in another change of leadership. There was a modest improvement in performance for 2010, also the 200th anniversary of the Peugeot brand, but losses again the year after. That prompted the creation of a potentially significant sourcing alliance with GM, also struggling in Europe. However that project fell flat and was partially unwound only a year later at the American company's instigation. Instead, PSA's Chinese partner DongFeng Motors and the French state agreed in 2014 to provide much-needed cash to keep the business afloat.
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Adbrands Weekly Update 16th Feb 2017: General Motors is considering an exit from the European car market. The US group is in talks with PSA Peugeot Citroen of France over the potential sale of GM's long-suffering European division Opel, which also includes UK brand Vauxhall. A combined PSA-Opel would become Europe's second largest carmaker after Volkswagen, overtaking Renault. The advantages for PSA would be greater scale, improved manufacturing capabilities and electric car technology it doesn't currently have. For GM, the sale of Opel would finally draw a line under a longstanding drain on its resources, which has racked up average losses of $1bn a year for for the past 15 years. It has considered the sale of Opel several times before, most recently in 2009 when GM was itself teetering on the brink of bankruptcy. A deal was drafted with car parts manufacturer Magna, only to be cancelled shortly before signature by GM's new post-restructuring management team. A deal is by no means certain. In addition to competitive concerns, GM and PSA face several challenges in structuring a new arrangement, not least to appease the German government and Opel's workers, who were given no advance warning of a possible sale. Both fear heavy job cuts. GM CEO Mary Barra and Peugeot's Carlos Tavares have both gone to Germany to meet with managers, and representatives of the unions and the government.
Adbrands Weekly Update 7th April 2016: Keen to take advantage of the booming American car market, PSA Peugeot Citroen is planning a return to the US for the first time in 25 years. The French manufacturer pulled out of the US in 1992 citing fierce competition from Japanese manufacturers. CEO Carlos Tavares told investors the company would dip its toe back into the US in 2017 with a launch of a car-sharing service, similar to the one it runs in France in partnership with Bollore Group. If that works well it would hope to relaunch the Peugeot and or Citroen brands in the US in around 2020. Separately this week, the group officially changed its name from PSA Peugeot Citroen to PSA Groupe.
Adbrands Weekly Update 25th Feb 2016: French auto group PSA Peugeot Citroen reported its first net profit for five years as a result of a rigorous programme of cost-cutting and pricing increases introduced by CEO Carlos Tavares since 2014. Revenues were up 6% to E54.7bn, while attributable net income hot E899m, compared to a E706m loss the year before. Operating income from recurring business more than tripled.
Adbrands Weekly Update 20th Nov 2014: Publicis Groupe scored a point off French rival Havas by securing a position on the PSA Peugeot Citroen roster. Havas traditionally serves PSA while Publicis is aligned with Renault. This week though, Publicis was awarded global creative for PSA's relaunched DS brand, the former Citroen model now being carved out as a brand in its own right. To avoid a conflict with Renault, the account will be handled by La Maison, Publicis's unconventional partnership with Conde Nast magazines and Google, with creative overseen by recently acquired US-based creative boutique aR New York.
Adbrands Weekly Update 31st Jul 2014: Struggling French automobile group PSA Peugeot Citroen reported its first quarterly profits for three years, as the turnaround plan led by new CEO Carlos Tavares appeared to gather impetus. Operating income jumped to E477m, excluding exceptional items, compared to a E100m loss a year ago. A key factor was a sharp rise in sales to China, prompted by the recent alliance with local manufacturer DongFeng Motors, now one of PSA's three controlling shareholders. PSA's sales to Asia jumped 27% during the quarter, more than twice local market growth of 13%.
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