Renault doing better than PSA in coping with European crisis

Article by Anita Panait, on October 16, 2012

French carmakers Renault and PSA/Peugeot-Citroen may be down for now due to the current market situation in Europe, but they are making progress in dealing with their own weaknesses. Renault and PSA are both suffering from stagnant domestic stakes, excessive production capacity, costly payrolls and stiff competition from non-French carmakers like Hyundai and Volkswagen.

Renault and PSA’s plan of action to cope with the situation includes cutting excess capacity, expanding product lineups, signing partnerships with other carmakers and opening out overseas. Of the two French carmakers, Renault seems to be making more progress. It could be because Renault is less reliant on its sales in Europe and is sharing product development cost with its Japanese partner, Nissan.

On the other hand, PSA’s partnership with General Motors is not expected to bring in huge results within five years. PSA is also having a hard time posting growth in new markets like China.

Letting financial figures speak, Renault really outdid PSA. Although Renault suffered a 37-percent drop in net profit to EUR786 million in the first half of 2012, the results show that the carmaker still managed to remain in black.

This is in sharp contrast to PSA’s results in the first six months of 2012. For the period, PSA posted EUR819 million in net loss, compared to EUR806 million in profit a year earlier.

Despite its success in achieving positive results in the first half of 2012, Renault remains on its toes. In an interview with Automotive News Europe, Carlos Tavares, Renault’s Chief Operating Officer warned that Europe's continued economic slide will force the carmaker to remain in turnaround mode for a while.

Tavares remarked that with the current problems in Europe going to last for a few years, Renault’s strategy would be to “to do more with less, or better with less." Tavares wants every Renault employee to think twice before spending, saying that they should act as if they are spending their own money.

Topics: renault, psa

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

The Shooting Brake is probably the least rendered body shape in the automotive world. But it’s also the most sought after design among car nuts for its unique, old-fashioned charm....
by - January 23, 2017
Perhaps to make the upcoming Valentine’s day more special, Tinder dating app and Ford UK have cooked up a special blind date for all the single blokes and chicks in...
by - January 23, 2017
2017 is undeniably a very busy year for BMW. After introducing the new 4-Series, the German automaker has just released several new updates. In relation to this, BMW is also...
by - January 23, 2017
The renowned Shelby Super Snake is now 50 years old! As we greet the Super Snake a “happy birthday” or a “happy anniversary,” Shelby itself is celebrating half a century...
by - January 23, 2017
Nearly a year after the Subaru XV Concept was unveiled at the 2016 Geneva Motor Show in Switzerland, this SUV study is making its North American debut at the 2017...
by - January 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries