PSA Peugeot Citroen is historically one of France's biggest carmakers, and regained its former position as the #2 in Europe following a shock deal to acquire GM's Opel and Vauxhall brands in 2017. It got bigger still in January 2021 following completion of its merger with Fiat Chrysler to create Stellantis. Until recently, PSA's traditional focus on its home market, as well as recurrent financial problems since the 1980s, had caused it to be overshadowed by domestic rival Renault. PSA attempted to kickstart international expansion through aggressive moves into Asia, Latin America and the Middle East, but sales 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 sourcing alliance with GM, also struggling in Europe. Although that project fell flat and was partially unwound only a year later at the American company's instigation, it was to sow the seeds of a much bigger deal a few years later. In the mean time, PSA's Chinese partner DongFeng Motors and the French state agreed in 2014 to provide much-needed cash to keep the business afloat. That return to financial stability allowed PSA to negotiate a dramatic new expansion to its portfolio in 2017, with an agreement to acquire GM's Opel and Vauxhall. It also subsequently made approaches, which were initially rebuffed, to Fiat Chrysler. Further talks proved more fruitful, and the two groups agreed terms for a full merger in late 2019. Carlos Tavares, architect of the group's spectacular recovery since 2014, was named as CEO of the newly created Stellantis group. With the PSA portfolio, Peugeot and Citroen operate as separate brands, accompanied by DS, which was spun out of Citroen in 2014. These are now partnered by Opel across continental Europe and Vauxhall in the UK. Combined volumes were 3.48m vehicles in 2019, falling to 2.91m in pandemic-impacted 2020. The figure for 2019 was made up of 1.45m Peugeot cars & LCVs, 990k Citroen, 62k DS and 973k Opel & Vauxhall. Top selling models were the Peugeot 208 small car (277k), Peugeot 3008 SUV (241k) and Citroen C3 small car (240k). Europe is the group's main region by far, contributing 87% of volumes. The Middle East & Africa added another 5% and China 3%. The main auto manufacturing business is partnered by components division Faurecia. Combined revenues for 2019 were €74.7bn with net income of €3.6bn.
Capsule checked 2nd March 2020
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Historical profile information for PSA Groupe
Adbrands Daily Update 8th Sep 2020: "Happy Day". BETC Paris pulls out a few cinematic stops for the new fully electric Citroen range, with some lovely retro Gallic production designs. Once again, Citroen proves itself - in BETC's hands at least - to be the most stylish of the brands under what is currently the PSAS umbrella. Somehow though - and this is just a minor criticism - the choice of such a thoroughly American backing track jars slightly with the visuals. Clearly it was the words 'Happy Day' they were after, but a more distinctively French musical accompaniment might have felt more appropriate.
Adbrands Daily Update 16th Jul 2020: PSA Groupe and Fiat Chrysler Automobiles have settled on a name for their soon-to-complete merger, expected in 1Q 2021. The name of the new corporate umbrella will be Stellantis. The new name, developed by Publicis Groupe, is derived from "the Latin verb 'stello' meaning 'to brighten with stars'," said both companies. "It draws inspiration from this new and ambitious alignment of storied automotive brands and strong company cultures that in coming together are creating one of the new leaders in the next era of mobility."
Adbrands Daily Update 1st Jul 2020: Omnicom scored a notable victory with the capture of the global account for French carmaker Peugeot, which has spent more than three decades at Havas, most recently overseen by BETC. The US group will take over the business at the beginning of 2021 with a new custom-built agency, OPEN, or Omnicom for Peugeot Engine. "By leveraging Omnicom's best talent and most efficient technologies, wherever they are located, Peugeot will benefit from a new, integrated, international agency model," said Peugeot market chief Thierry Lonziano. Havas keeps control of Peugeot's sister brand Citroen.
Adbrands Daily Update 17th Mar 2020: Auto manufacturers across Europe have begun to shut down production to reduce the spread of coronavirus. PSA Groupe and Fiat Chrysler announced the suspension of all manufacturing in the region, while Renault shut all 12 of its French factories and Volkswagen shuttered plants in the worst hit countries of Italy and Spain. Ford and Nissan also closed some operations in Europe, mainly in Spain.
Adbrands Daily Update 31st Oct 2019: Spurned earlier this year by Renault (or at least by Renault's French government shareholders), Fiat Chrysler has turned instead to Renault's arch-rival rival PSA. Just a day after news they were in talks first broke in the Wall Street Journal, terms for a full merger of equals were agreed by both companies' boards. PSA's Carlos Tavares will become CEO of the combined entity, with FCA's John Elkann as chairman. The all-share deal is being structured as a merger of equals, with each group's current shareholders ending up with 50% of the resulting business. Exor, the investment company for Fiat's Agnelli family, of which Elkann is chairman, will be the biggest shareholder in the group with 14.5%. The Peugeot family and its Chinese partners Dong Feng Motors will each have 6%. Assuming all goes according to plan, the merger would create a group with sales of around 8.7m vehicles annually, displacing General Motors as the global #4 manufacturer.
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