PSA Peugeot Citroen (UG-FR)

QUOTE AND NEWS
SeekingAlpha  Aug 14  Comment 
By Nelson Alves: Peugeot (OTC:PEUGF) (OTCPK:PEUGY) is a France-based constructor of cars, light commercial vehicles and motorcycles. The company comprises the Peugeot and Citroen brands. Presently, Peugeot is going through one of the most...
Reuters  Aug 6  Comment 
French carmaker PSA Peugeot Citroen on Wednesday denied an Indian newspaper report of partnership talks with Mahindra & Mahindra Ltd to share technology and production facilities.
The Times of India  Aug 4  Comment 
When contacted, M&M refused to comment.An emailed reply by PSA Peugeot said, "PSA has recently implemented a new organization by region.
SeekingAlpha  Aug 3  Comment 
Peugeot SA (OTC:PEUGF) Q2 2014 Earnings Conference Call July 30, 2014 2:30 AM ET Executives Carlos Tavares – Chairman Jean-Baptiste de Chatillon – EVP, Finance Maxime Picat – CEO, Peugot Brand Gregoire Olivier – EVP,...
Automotive World  Jul 30  Comment 
Consolidated revenues of €27.6 billion, and €18.6 billion for the Automotive Division, stable compared with first-half 2013. Strong improvement in consolidated operating income, to €477 million, and in the Automotive Division’s operating...
Financial Times  Jul 30  Comment 
Turnround plan of Europe’s second-largest carmaker gains credibility as it reports first-half operating income of €477m and higher sales to China
MarketWatch  Jul 30  Comment 
Earnings reports are high on the agenda in Europe on Wednesday, moving shares of prominent companies such as Peugeot, Airbus Group and Barclays.
newratings.com  Jul 30  Comment 
PARIS (dpa-AFX) - French car maker PSA Peugeot Citroën (PEUGF.PK) said that Group share's loss for the first half of 2014 narrowed to 114 million euros from 471 million euros in the previous year. Basic loss per ¤1 par value share was 0.25...
Wall Street Journal  Jul 30  Comment 
Stiff cost cuts helped French car maker Peugeot Citroën's automobile unit to nose back into the black in the first half for the first time in three years, paring the overall company's losses amid rising sales in Europe and China.
Clusterstock  Jul 29  Comment 
In 2013, French automaker Citroen sold 3,500 DS luxury vehicles in China. That made it practically a rounding error in the Chinese luxury car market. But what a difference a year makes. According to Chinese news outlet Gasgoo, Citroen DS...




 

PSA Peugeot Citroen S.A. (EPA:UG) is Europe’s second largest automaker with 13.8% of the European market and the sixth largest worldwide with 4.8% worldwide market share.[1] The company makes both passenger cars and commercial vehicles, making 2/3 of its sales in Western Europe.[2] Unlike PSA’s German and Italian competitors, which often sell automobiles under numerous brand names, PSA has just two - Peugeot and Citroen.

In addition to its automobile division, Peugeot includes:

  • Banque PSA Finance, which supports the sale of Peugeot and Citroen vehicles by financing new vehicle and replacement parts inventory for dealers and offering financing and related services to car buyers[3]
  • Faurecia, an automotive equipment manufacturer focused on four component families: seats, vehicle interior, front end and exhaust systems[3]
  • Gefco, which offers logistics services covering the entire supply chain, including overland, sea and air transport, industrial logistics, container management, vehicle preparation and distribution, and customs and value added tax (VAT) representation[3]
  • Peugeot Scooters, which designs and manufactures scooters and motorcycles.[3]

In November 2009, PSA Peugeot Citroen S.A. acquired EMCON Technologies.[3]

Company Overview

Business and Financial Metrics

First Half of 2010 Results[4]

For the first half of 2010, Peugeot reported revenues increased 20.8% driven by successful new models, market share gains and favorable demand worldwide. The company saw a turnaround in recurring operating income of €1,137 million compared to a loss of €826 million in the first half of 2009. Peugeot saw a significant recovery in automotive recurring operating income, totaling €525 million for the first half of 2010 compared to a loss of €904 million in the first half of 2009. Peugeot reported net income for the first half of €680 million. Notably, the company saw a sharp profit increase at Dongfeng Peugeot Citroën Automobile in China.

Business Segments

Automobile Division (79% of 2009 revenue)[5]

This segments involves the design, manufacture and sale of passenger cars and light commercial vehicles under the Peugeot and Citroën brands.

Automotive Equipment Division (15.3% of 2009 revenue)[5]

Peugeot's Faurecia group specialize in Interior Systems, Automotive Seating, Automotive Exteriors and Emissions Control Technologies. Faurecia produces automotive components such as seats, cockpits, acoustic packages, doors, front-ends, and exhaust systems. Worldwide Faurecia has 60,000 employees and 190 manufacturing facilities, creating revenues of the €7,432 million during 2009.[6]

Transportation and Logistics (2.2% of 2009 revenue)[5]

The Gefco group specializes in Logistics and Vehicle & Goods Transportation. This includes vehicle logistics, transportation and supply-chain management for automakers worldwide. This division had sales of €1,046 million in 2009.[7]

Finance (3.2% of 2009 revenue)[5]

Banque PSA Finance group provides retail financing to customers of the Peugeot and Citroën brands and wholesale financing to the two brands’ dealer networks.

Other Businesses (0.3% of 2009 revenue)[5]

Peugeot Motorcycles is the third largest producer of small motor cycles and scooters in Europe.[8]

Trends and Forces

Growing Importance of Fuel Efficiency

PSA held 26% of the European market for vehicles emitting less than 130 grams of CO2 per kilometer, as 52.1% of PSA’s production volume was diesel powered as the company has embraced fuel efficient diesel engines.[9] [10] High fuel prices and government regulation of automobile fuel efficiency make the successful development of fuel efficient cars important to any automaker’s future, and PSA has long produced exclusively small, fuel-efficient automobiles as opposed to SUVs or performance vehicles. Of the European automakers, which have comparatively better efficiency in comparison to Japanese or U.S. producers, PSA's line-up of vehicles has the lowest overall CO2 emissions.[11]

PSA in Emerging Markets

PSA has several factories in Eastern Europe, and has plans to open its first Russian factory in Kaluga during 2010. The company also plans to build two new factories in China, both of which will be operated as a joint venture with a domestic Chinese automaker. Growing consumption from the BRIC economies provides an opportunity for automakers over the next several decades, and PSA has production facilities in Brazil, China, and Russia (but not India).[12] The company’s strongest emerging markets are Brazil and Argentina.[13] Competition already exists for PSA in these markets - firms like Volkswagen (VLKAY), Ford Motor Company (F), and General Motors (GM) already have multiple manufacturing facilities in China, and control a large percentage of the market share.

High Labor Costs in European Union

Approximately 90% of PSA’s employees work in Western Europe, a region with one of the highest labor costs in the world. Labor in Western Europe costs on average 20% more than in the U.S., twice as much as in Korea, and six times more than in Brazil.[14] In part because of the unique relationship between the French state and major national firms such as PSA (the French Government has been shareholder in two-thirds of France's 20 biggest companies in the past several decades[15]) and also due to PSA’s limited operations outside Western Europe, the company has little latitude to transfer production to areas with lower labor costs.

Competition

Unlike other automakers, PSA Peugeot Citroen only markets its products under two brands: Citroen and Peugeot. Citroen is an upscale brand while Peugeot focuses exclusively on the mass market. This focus has been advantageous, as competitors from GM to BMW have been distracted by trying to manage too many brands. In spite of its limited brands, PSA produces vehicles that compete for every niche of the mass auto market, excluding performance and luxury vehicles.

The automakers Renault, now merged with Nissan Motor (NSANY), and FIAT S.p.A. (F-MI) are PSA's chief competitors due to their focus on smaller vehicles and the Western European market.

References

  1. The Group in 2008
  2. The Group in 2008
  3. 3.0 3.1 3.2 3.3 3.4 Reuters: Peugeot Company Profile
  4. Peugeot Investor Relations: "First Half 2010 Results"
  5. 5.0 5.1 5.2 5.3 5.4 Peugeot Investor Relations: Financial Information by Business Segment
  6. The Group in 2008
  7. The Group in 2008
  8. The Group in 2008
  9. The Group in 2008
  10. The Group in 2008
  11. The Economist: The European car industry
  12. The Group in 2008
  13. The Group in 2008
  14. Bureau of Labor Statistics
  15. The Economist: The state as owner
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