Editor's welcome: The man making the lion king again, CAR+ May 2016

Published: 01 April 2016

► Editor Phil McNamara welcomes you to the May issue
► Peugeot look for revival under new PSA Groupe name
► How Carlos Tavares has turned the company around

Ford, Peugeot, BMW: they made the cars my family bought, shaping my car world. The 205, 405, 306, 406 all did a shift – indeed my father was probably the only Brit to buy a 605! But now an E-class and Polo currently sit on his drive.

McNamara Sr is representative of his fellow CAR readers: Peugeot has slumped to 19th in our ownership rankings, and 27th in the list of brands you’d like to own next. Citroën lies 21st for ownership, and is 17th most desired as a next car. CAR once revered Citroën for its comfort, trend-setting design and pioneering tech, more recently Peugeot was lauded for its ride and handling. No longer.

But the company is changing, under a new name, PSA Groupe, and with a new strategy from CEO Carlos Tavares. He pulled off the automotive turnaround-equivalent of the moon landing, mused one analyst, by steering the bailed-out firm from a €555m loss in 2014 to €1.2bn net profit. Cost cuts and pricing discipline ensured survival, his new plan is all about profitable growth. 

Tavares inherited a bloated range of 45 models, with wasteful duplication in China and Europe. That range will be almost halved. In the pipeline are 26 new cars, most of them global. Eliminating duplication will enable R&D to focus resources to create fewer, better cars. PSA is rationalising the new models onto two architectures, with the capability to underpin seven plug-in hybrids and four EVs.

Digitization will be critical to the tech  push. Connectivity will enable wireless upgrades on cars, traffic jam assist will arrive in 2018 and ‘eyes off’ autonomous capability by 2021. PSA will also intensify its efforts as a mobility provider. 

What of the brands? Citroën, once synonymous with ‘cashback’ bungs to shift metal, grew transaction prices by 3% in 2015, despite the Cactus and C4 Picasso being the only cars I’d recommend to friends. The seven new models it launches by 2018 will prioritise comfort, charming design and connected features, largely the tenets that made the brand’s reputation in CAR. 

Peugeot measures itself against VW on price and quality. That’s fine, but risks sacrificing its once distinctive, pretty design on Germanic clones such as the 308. The GTis and RCZ R show the art of ride and handling is alive. Non-enthusiasts may value connected features more, and plans for Peugeot to build a digital relationship with 700,000 customers, offering them pay-as-you-go tailored to when and how they drive, are smart.

Meanwhile the group will continue to build its aspiring DS brand. The goal?  For the cars business to return 4-6% margin, and grow revenues 10-15%. And the ultimate test? Making cars good enough to relaunch in North America. That would be one hell of a turnaround. 

Read more from the May 2016 issue of CAR magazine

By Phil McNamara

Editor-in-chief of CAR magazine

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