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. The company makes both passenger cars and commercial vehicles, making 2/3 of its sales in Western Europe. 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:
In November 2009, PSA Peugeot Citroen S.A. acquired EMCON Technologies.
First Half of 2010 Results
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.
This segments involves the design, manufacture and sale of passenger cars and light commercial vehicles under the Peugeot and Citroën brands.
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.
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.
Banque PSA Finance group provides retail financing to customers of the Peugeot and Citroën brands and wholesale financing to the two brands’ dealer networks.
Peugeot Motorcycles is the third largest producer of small motor cycles and scooters in Europe.
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.  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.
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). The company’s strongest emerging markets are Brazil and Argentina. 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.
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. 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) 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.
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.