Peugeot 308 named European Car of the Year

The Peugeot 308 has front LED lights and a chrome finish to give it a more upscale look.
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GENEVA (Bloomberg) -- The Peugeot 308 was named Europe's Car of the Year after winning more votes than six other vehicles, including electric autos from BMW and Tesla Motors. The win gives PSA/Peugeot-Citroen a boost as the automaker struggles to return to profit.

Last year, the Volkswagen Golf, which competes directly with the 308, won the award.

"We talked a lot about Peugeot in the past few months, but not enough about cars, so I'm happy now to talk about cars," Maxime Picat, head of the Peugeot brand, said at a press conference today to announce the award.

In reference to the Peugeot brand logo, he said "the lion is hungry" after waiting for its first award since 2002.

The 308 received 307 points from the jury of European business and trade journalists. The BMW i3 came second with 223 points and Tesla's S model was third with 216 points. The Citroen C4 Picasso took fourth place with 182 points followed by the Mazda3 with 180 points. Skoda's Octavia took sixth place with 172 points and the No. 7 position went to the Mercedes S class.

"Today's award is a good indication that PSA is at the strong point in their model cycle right now," and "it is now up to PSA to translate this into increasing market share in Europe," Erich Hauser, a London-based based analyst at International Strategy & Investment Group, said. "It feels like it's now or never for Peugeot in Europe."

Picat said Peugeot made some "radical" decisions on the 308 to improve efficiency and streamline the interior, including a smaller steering wheel to give a sportier feel.

"Today is only a starting point," he said. "The award will help my sales and marketing teams" throughout Europe.

The 308 is part of PSA's strategy of developing upscale cars to end losses following a six-year contraction in Europe's auto market. The French company has been unprofitable for two years in a row, and it agreed last month to sell 14 percent stakes to Chinese partner Dongfeng Motor and the French state as part of a 5.27 billion-euro ($7.25 billion) fund-raising effort to overhaul the model line.

The market share of Peugeot and its sister brand Citroen in Europe narrowed to 10.9 percent last year from 11.7 percent in 2012, according to figures from the ACEA regional industry group. Last month, the group's share of industry sales expanded 0.2 percentage point from a year earlier as its 6.9 percent gain in deliveries exceeded the market's 5.2 percent growth.

Automotive News Europe contributed to this report

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