Peugeot Is Back In Profit, Thanks To New CEO

Peugeot is a popular French car maker whose models are available to buy all around the world. It is a company first formed back in the 19th century by the Peugeot family. They became interested in automobiles just before the 20th century.

They have a long and rich history for producing cars and other automobiles, and also for buying other car brands too. In 1975, they bought Citroen. Three years later, they took over the European division of Chrysler. Some models sold under the then-revived “Talbot” marque.

Unfortunately, the company’s fortunes started to go sour at the beginning of the 21st century. In 2006, PSA Peugeot Citroen closed their manufacturing plant in Coventry, England. That resulted in a loss of up to 8,000 jobs, including those involved within its supply chain.

Towards the end of 2013, further restructuring occurred. The Peugeot family had no choice but to give up their dominant stake in the firm. Most of their shares got sold to Chinese investors and the French government.

But it’s not all bad news. Every cloud has a silver lining, so they say, and Peugeot appear to have found theirs!

Since the beginning of 2014, Peugeot’s new CEO, Carlos Tavares, has been at the helm. In a surprise announcement to shareholders, Mr. Tavares has turned Peugeot’s fortunes around.

The company’s operating cash flow increased to 1.67 billion euros from the period of January to June. In comparison, it only increased by 203 million euros in the same period last year.

How Peugeot’s new CEO is increasing the company’s fortunes

Mr. Tavares has managed to cut down on vehicle stock and improve on supply chain inefficiencies. After the share sales, the new CEO set about improving profitability.

He has promised to cut the model lineup by nearly 50%, reduce operating capacity and raise vehicle prices. He also made the ambitious step to align wage and component costs, so that the operating margin can be raised by 2% in 2018, and 5% five years later.

He has promised to cut the model lineup by up to 50%, reduce operating capacity and raise vehicle prices. He also made the ambitious step to align wage and component costs. That will help raise operating margins by 2% in 2018, and 5% five years later.

The news of Mr. Tavares’ plans, as well as the increased cash flow, caused Peugeot shares to spike by a whopping 8.5%.

Good news for dealers, too

The developments at Peugeot are also a positive sign for the French firm’s worldwide dealer network. According to sources from www.rrg-group.com, the model range shake-up will increase consumer confidence.

Motorists have an ever-changing need for different features from today’s modern cars. By looking at the current line-up, Peugeot will be able to make a good profit on its well-performing models.

Some analysts say that too much choice can hamper a car buyer’s decision-making process. By keeping the range simple and offering well-featured models, Peugeot can be a leader in the car world once again.