'Car guy' Tavares will become PSA chief on March 31
PARIS -- Industry analysts say former Renault executive Carlos Tavares, who will succeed Philippe Varin as PSA/Peugeot Citroen CEO on March 31, is the right man to lead the automaker -- at the right time.
Tavares, 55, will take on the CEO role just a couple of days after the French carmaker, China's Dongfeng Motor Co. and the French government are expected to sign a 3-billion-euro ($4.1 billion) capital tie-up negotiated by Varin.
Tavares is a former protege of Renault CEO Carlos Ghosn and was second in command at the French automaker before leaving the company last summer.
He has previously worked with Dongfeng, negotiating a joint venture between Renault and the Chinese carmaker. He had a falling out with Ghosn after saying in an interview last year that he wanted to run a global carmaker such as General Motors or Ford Motor.
While at Renault, Tavares, who races cars himself, was working to add a sports-car brand and the Initiale Paris luxury marque at the automaker.
Industry analysts say Tavares is a "car guy" and the right man at the right time for troubled PSA.
Tavares: Moves to PSA after long career at rival Renault.
Max Warburton of Bernstein Research noted in an open letter to PSA Chairman Thierry Peugeot last week that Tavares was instrumental at Renault in raising 2.3 billion euros in working capital in three years by squeezing suppliers, cutting logistics chains, reducing work-in-progress and pushing more financial burden onto dealers. Those savings were more than twice the cash infusion PSA is expected to get from Dongfeng.
Warburton urged Thierry Peugeot to "give Mr. Tavares carte blanche to work fast and aggressively (he is a true man of industry with strong experience of what levers can be pulled – we are convinced he will find more savings than Mr. Varin)."
Lisbon, Portugal-born Tavares spent more than three decades at Renault and affiliate Nissan Motor Corp., rising through the ranks to head Nissan's American operations and become Ghosn's chief operating officer at Renault.
Erich Hauser, a London-based automotive analyst with International Strategy & Investment Group, said Tavares would be good for PSA.
"Firstly, Tavares is a real car guy. Secondly, he spent his career at Renault-Nissan and perhaps this is being seen as a potential role model for a Dongfeng-PSA alliance," Hauser said in November when PSA announced the executive would join the automaker.
Bloomberg contributed to this report