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Carmakers hoping the worst is over

Carmakers hoping the worst is over
By Euronews
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As well as unveiling their new models at the Frankfurt motor show Europe’s carmakers have been keen to talk up the green shoots of recovery, even as sales remain stubbornly low.

However the atmosphere at the event has improved: it has gone from desperate to downbeat, with a few manufacturers daring to use phrases like “a little light at the end of the tunnel” and “the uncertainty is dissipating”.

But all this comes among unresolved issues including cutting capacity, closing factories, and laying off workers

One of those under greatest pressure is France’s PSA Peugeot Citroen.

Last year it closed a major factory and now is talking to unions about a wage freeze and downsizing more French plants.

Antoine Juillard from euronews spoke with Maxime Picat, chief executive of the Peugeot marque in the PSA Peugeot-Citroen group and asked him: “What state is PSA in as the Frankfurt motor show opens?”

Maxime Picat, Peugeot CEO: “We are clearly on track thanks to our cost reduction plan, but also thanks to the green shoots [first signs of growth] that our new models – like the 2008 – have created in the market. We already have 40,000 orders for our new 2008 model, and now the star of the Frankfurt motor show will be the new 308.”

euronews: “Europe is Peugeot’s top market, a market where sales have fallen again this year, do you have any reason to hope for a turnaround next year?”

Maxime Picat: “When you look at the figures you can see that in the first half of the year, the European market declined by seven percent. But it is in line with our forecast of minus five percent for the year, which means that in the second half of the year there will be a slowdown in the fall of the market, and after maybe the market will start growth, but the real question is the speed of the recovery. It would likely be slow.

euronews: “You’ve unveiled the new Peugeot 308 at Frankfurt. You have just launched the 2008 which has been well received. In response to the downward pressure on prices, particularly in Europe, is your stategy to bring out more models and variations on those model to hang on to your customers?”

Maxime Picat: “Our stategy is clearly to respond to our customers needs. We have anticipated some years ago that there was a fast growing segment for the future – that is the small car/SUV. That is the reason why we have decided to launch the 2008, and it’s a real success already, 40,000 orders as I told you. So, it’s first about responding to what our customers want, but we have also to go upmarket, which means our cars have to improve their quality, and the best example of that is the new 308, with quality standards that are very close to premium manufacturers.”

euronews: “There’s been a marked economic slowdown in some emerging market countries like Brazil, India and Russia. Is Peugeot going to change its strategy in those countries – including how much you invest there?”

Maxime Picat: “Outside Europe we have targeted as our main priorities China, South America and Russia. And we see that we have got good results in China, as I’ve already mentioned. But if you look at Argentina we have also fantastic results there, as well as in North Africa. So, we keep investing a lot in these key international regions, because we believe they will help us to balance the situation of the European market, which is more difficult.”

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