PSA chairman Carlos Tavares

PSA Back in the Race plan: Tavares to cull cars, quell losses

PSA chairman Carlos TavaresPSA boss Carlos Tavares today revealed the Back in the Race plan that will see underperforming models culled in an attempt to turn losses into profits.

The PSA chairman revealed today’s model portfolio of 45 cars will be cut right back to 26 cars, in an attempt to “focus our creative power on a more limited range of cars people want to buy.

“If you have less cars, you will do a better job – the cars will be more competitive compared with our competitors.”

The range cutback will be compete by 2020 and, insists the firm, “improve market coverage and improve margins by targeting the most profitable segments”.

Cars will be based around three key brands – Peugeot, Citroen and the luxury DS line – and all will be global brands, said Tavares.

The model cull and brand focus are two parts of Tavares’ four-point Back in the Race roadmap – he also wants all PSA regions globally to undergo profitable growth, with the brand’s performance in China the case study.

PSA’s manufacturing side will also be overhauled to improve efficiency – with a focus in Europe and, in particular, France, added Tavares. French unions will be watching with interest…

Back in the Race goal: profits

Tavares is rolling out the Back in the Race plan to turn around big losses for PSA that have left it teetering on the edge and effectively saved only by an alliance with Chinese giant Dongfeng.

Former Renault Nissan Alliance number 2 Tavares is targeting a turnaround that will see, “before 2016… or 2016 at the latest”, free positive cashflow generated.

Then, for the next three years, PSA will “accumulate €2bn of positive cashflow” and, from that point on, be positive in operating profit margin.

So, turn losses into profit and ensure the company never again slips into the red.

“With this Back in the Race plan, I am committed to accelerating the Group’s recovery by channeling all of our teams’ creative potential so that we can quickly get back on the road to profit,” summarised Tavares.

What do you think of PSA’s Back in the Race plan? Share your thoughts below…

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