It's an old story, one that has been recurring regularly for at least a decade: the possibility of a marriage between the Fiat (now associated with Chrysler) and the French of Psa Peugeot-Citroen. We were talking about it at the time of the serious Lingotto crisis, in the early 2009s, when Jean-Martin Foltz's Psa was held up as a model for the rebirth of an automotive group. It was evoked in XNUMX, at the time of Fiat's alliance with Chrysler and the (failed) attempt by the Turin-based company to grab Opel as well: at the time the French group, supported by public funds from Paris, resisted the crisis, certainly better of the compatriot Renaultthe eternal rival. She talks about it now. And, beyond denials and more or less annoyed "no comments" by the two possible interested parties, one thing is certain: never before has Psa Peugeot-Citroen, which is the largest French manufacturer and the number two in Europe, but in a deep, very deep crisis, it needs an ally. Especially a partner who releases it from the European market. That supports him in the race towards emerging markets.
Worse and worse in the last six months. PSA's situation deteriorated rapidly in the second half of 2011, even beyond the worst prospects of analysts. In the first six months, despite the disappearance of the scrapping aid in force in the major European markets until 2010, sales had held steady, totaling 405 million euros. After the summer, the situation got worse: for everyone, but even more for Psa. The leaders of the group have multiplied the profit warnings, up to admitting from the mouth of the president Philippe Varin “significant losses” in the second half. The definitive data are not yet available but it could be the 2011 global accounts that close in the red. The thorn in PSA's side is Europe: here Peugeot-Citroen sales fell by 8% in the first eleven months against a general decline in the sector of 1,2%.
The performance of the share reflects investor mistrust. The title to Paris Stock Exchange it closed 2011 down by 56,4%, with a capitalization more than halved. Just to get an idea of the debacle, it suffices to remember that in the same period Renault (considered to be in worse shape than its competitor until a few months ago) lost 38,3%, while the automotive sector lost 23 percent last year . “The two French manufacturers and PSA in particular are too exposed to a mature market like the European one – underlined Xavier Caroen, sector analyst for Kepler Capital Markets in Paris in recent days -. While their main competitors and above all the Germans are more exposed to emerging markets, such as China and Russia and Latin America, but also to the USA, which could grow in 2012”.
The weaknesses of Psa. The share of sales in Europe of PSA corresponds to 59% of its world total: far too high. Until 2010 Psa had positively felt the scrapping aid financed by France and the major countries of the Old Continent. Not only that: the group had marketed new successful models (in particular the Citroen DS series) realizing what the PSA leaders have called "la montée en gamme", the attempt in the production segments where they are traditionally stronger to approach German standards , improving the image among consumers. In recent months, however, Psa seems to be losing ground (the 207 for segment B needs to be renewed as soon as possible). And then there is the other big problem, the too high employment costs in France, still fundamental (indeed, too much) as a production base. Throughout 2011 there was a push and pull between the company, which wants to reduce the number of employees in France, and the trade unions, which are resisting. AND Nicolas Sarkozy and the Government in the middle, in this pre-electoral period (the first round of the presidential elections is set for April) is reluctant to endorse a downsizing. Especially since in 2009 Psa had received a three billion euro loan from the state, with a commitment not to relocate in the short to medium term. Last November, however, Varin had to admit that yes, PSA will cut production in Europe and above all in France (6 fewer jobs across the Old Continent in 2012, of which 4.300 in France). At the same time, PSA has decided to double the investments planned in Brazil, where the group is lagging behind Fiat and VW.
Ties with Fiat. Marchionne spoke of "pure speculation" with respect to a possible marriage with Psa. But it is certain that, beyond Brazil, the advantages for Psa of hooking up to an already strongly international tandem such as the Fiat-Chrysler one would not be lacking. Among other things, Fiat and PSA have been collaborating for some time on various models, in particular on the production of small utility vehicles, an alliance that has been extended until 2019. The one on minivans, on the other hand, will be interrupted in 2017 but only because the Turin can now make use of Chrysler production platforms. There are also personal (let's say) affinities between Fiat and Psa. 30% of the French group is still in the hands of the Peugeot family. Who has recently regained weight at the managerial level managing to place one of his own men in the position of manager of the group's brands, Frederic Saint-Geours. The reshuffle took place in the midst of this latest deep crisis. The Peugeot dynasty, it is known, has always had good relations with that of the Agnellis.
