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

Recommended

Like it or not, Chevrolet may soon be offering a cheaper Camaro in hopes of competing with Dodge Challenger and Ford Mustang GT. Apart from the less expensive trim, the...
by - August 17, 2017
Recently, Porsche revealed a new Macan Turbo wearing a Performance Package and a unique Porsche Motorsport themed paint. At first look, it will remind you of the 919 Hybrid and...
by - August 17, 2017
The BMW M1 will be one of the most exclusive cars that will be showcased at the upcoming 2017 Pebble Beach Concours d'Elegance, alongside many other extravagant models. Firstly, there...
by - August 17, 2017
Aston Martin Vanquish Zagato makes its debut with a total of four variations including the Speedster and the Shooting Brake trims. As part of the limited edition model, the company...
by - August 17, 2017
Mitsubishi finally introduces the new Xpander MPV at the 2017 Indonesia International Auto Show in Jakarta Indonesia. Replacing the previous Expander, the new multipurpose vehicle will be mostly sold at...
by - August 16, 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