Peugeot Owner's and Service Repair manual

Before entering the strategic analysis of PSA Peugeot Citroen it is perhaps useful to analyse the competitive scene of the automotive market, in order to understand its own peculiarities and its evolution as well as the critical success factors to be met to ensure competitiveness [1], so that to assess, afterwards,whether the strategic dynamics of the Group comply with the expectations of customers that have become, at the same time, increasingly demanding.

In this regard, it is important to point out that the automotive market is among the most dynamic and complex ones, due to a number of special features characterising it, that can be described as follows: the huge investment needed to implement innovative models, the high technological level of the product, the wide range of the goods offered, their high value, the fragmentation of suppliers involved in the production of the car and so on. Currently, the motor sector is the one that is mostly suffering from the international crisis in the last two years, although it slowly started to recover in the second half of 2010,with increased sales in the leading European producers. However, the new political instability, caused by the wars that are affecting the countries of the Middle East (Tunisia, Egypt, Libya, Syria, Yemen,Bahrain), the major oil producers, has led to soaring fuel costs, whose rise is even due to speculative manoeuvring, thus seriously endangering the motor companies’ recovery.

Therefore, in the light of the recent events, among the already known critical success factors to be met,such as the product quality and innovation, minimised production costs, organisational flexibility to comply readily with the market evolution, it seems that, as compared to the past, international manufacturers are increasingly oriented to favour technological research, aimed on the one hand, at protecting the environment through reducing CO2 emissions and, on the other one, at dramatically reducing fuel consumption during the current serious energy crisis.

Peugeot Owner's and Service Repair manual
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However, the scenario that has just described has changed not only the strategies of the leading producers, but also the demand for cars at an international level, allowing those car manufacturers that are able to penetrate promptly new market segments, to achieve significant competitive advantages.

In particular, as regards the supply of the product, the automotive market evolution trends show that the major manufacturers tend to relocate upstream activities, including the final assembly, to Eastern Europe, by exploiting the competitive advantage of the low cost labour force in those countries, while the presence in the BRIC countries (Brazil, Russia, India, China) is explained by a strong technology transfer that, by the time passing, will lead the countries benefiting from technology to become totally autonomous.

These choices have brought about a lack of jobs in industrialised countries which, together with the end of incentives for car scrapping, has led the car company to experience a serious financial and social crisis (as shown by the events that have lately involved Fiat in Italy).

On the other side, as regards the supply, it is clear that the international economic crisis has created a divergence of trends in car registrations between the USA and the European Union, on the one hand, and such countries as China, India and Brazil on the other one. In fact, if the former have reduced registrations because of the recession, the latter experienced registration increase significantly due to a highly positive GDP (Gross Domestic Product), even in such a difficult period like the current one.

The History of PSA Peugeot Citroen
Before starting the strategic analysis of the Group, it is convenient to give a rapid historical survey, in order to understand the origins of the brand that has just celebrated 200 years of life.
Its history begins in 1810, when the Peugeot brothers turned the ancient family mill into a still foundry, launching the production of saw-blades under the name of "Peugeot Freres". As from 1833, the production was diversified and widened to include belt saws, umbrellas, coffee grinders as well as pepper grinders.

Afterwards, in 1858, Emile Peugeot patented the famous Lion Rampant tally distinguishing the products of the transalpine company, starting from the first velocipede produced under the Peugeot trademark, namely the "Grand Bi", dating back to 1882.

However, the true motor company, known worldwide under the name of "Société des Automobiles Peugeot" was set up in 1886, though it was not until 1929 that the first car was marketed, namely the 201,equipped with independent front wheels.

After the collaboration started in 1955 with the Italian designer Pininfarina, resulting in the production of the 403 model, another important stage for the development of the transalpine company was reached in 1965, when it took the judicial status of SA Peugeot, converted in 1976 following the merger with another popular French car brand, namely Citroen [2], [3]. The 80s and 90s saw the presidency of J. Calvet who,in 1992, decided to transform the company into the PSA Peugeot Citroen Group that is, today, the second European motor manufacturer and whose president has been Mr. Philippe Varin since 2009.

In this regard, in 2007, PSA Peugeot Citroen Group decided to pursue, among its strategies of action,the goal of sustainable development, implementing a plan called "10 sustainable development objectives for 2010-2011" in four areas, namely environment, social responsibility, governance and society;following the expectations of the Group, these aims should allow the company to pursue the ambitious goal of rising from tenth, at present, to seventh in the world producers rankings by 2015.

However, the above merger could be hindered by the joint venture that has just been made, on an equal basis, between Peugeot Citroen and BMW German company to develop new technologies for hybrid engines. This joint venture, called “BMW Peugeot Citroen Electrification”, that is going to be operational by the second quarter of 2011, should focus on the study and production of components, batteries,retrieval systems and management software, aimed at increased penetration of the hybrid market and at the extension of the current agreement providing only the joint development of the new Euro 6 four-cylinder gasoline, to the carbon fibre material that, though being very expensive, is at the same time increasingly present in the automotive industry to reduce the weight of the newly designed models [9].

As for the relocation of production, PSA Peugeot Citroen Group, like other major international producers, having previously concluded partnerships in the Eastern countries (Hungary, Poland and Czech Republic), now appear to have oriented their investments to emerging markets like China where,after the agreement with Dongfeng, a further one followed for the joint-venture with Chang’an local firm.

The initial investment was fixed at 395 million Euros per year, for the construction of about 200,000 items, namely engines, commercial vehicles and French cars made in four factories. In addition, as compared to the agreement with Dongfeng, that sells French models under the two brands of the French PSA Peugeot Citroen Group, the products manufactured by this joint venture will be marketed under a new brand [10].