PSA Peugeot Citroen (UG-FR)

QUOTE AND NEWS
Wall Street Journal  Oct 22  Comment 
Peugeot Citroën said revenue rose in the third quarter, boosted by strong growth in Europe and China.
Financial Times  Oct 22  Comment 
Latin American operations are still struggling
Automotive World  Oct 16  Comment 
DPCA laid the cornerstone for its fourth plant in Chengdu, China today to support its sales growth in China. Attending the ceremony alongside Carlos Tavares, Chairman of the Managing Board of PSA Peugeot Citroën, and Xu Ping, Chairman of Dongfeng...
Reuters  Oct 16  Comment 
Former PSA Peugeot Citroen head Philippe Varin and French employer organization Medef chief Laurence Parisot are on a list of proposed board members for French state-controlled...
The Times of India  Oct 15  Comment 
Mahindra Two Wheelers Ltd, a closely-held outfit of the $16.5 billion Mahindra Group, is buying controlling stake of 51% in Peugeot Scooters, the world’s oldest maker of motorized two-wheelers from France’s PSA Group, for Euro 28 million,...
The Hindu Business Line  Oct 10  Comment 
It is going to be a challenge to put the scooter script in place
Automotive World  Oct 9  Comment 
Despite its move towards innovation in the powetrain area with concept cars, the company won't be producing a bespoke electric car in the style of EVs produced by other brand such as BMW and Nissan. The post Peugeot on EVs: an option but not a...
The Times of India  Oct 8  Comment 
This is Mahindra Group's second acquisition in the two-wheeler space. It entered the scooters business through acquisition of Kinetic Motor in 2008.




 

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
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki