PARIS - PSA/Peugeot-Citroen plans more coordination of its two brands in emerging markets outside Europe.
A Peugeot model may be built at Citroen's plant in Wuhan, China, while Citroen and Peugeot operations in South America will become more integrated.
'We must improve the solidarity between Peugeot and Citroen in these countries,' said PSA Chairman Jacques Calvet. 'It may be through common dealers, common importers or common industrial operations.'
Calvet is changing the group's international strategy in an effort to increase volume.
His long-standing goal - to have one-quarter of PSA sales outside Europe by 2000 - will be difficult to reach. Non-European sales have grown little in recent years. PSA sold 260,500 cars and light commercial vehicles outside Europe in 1996, or 12.9 percent of the total.
PSA has been splitting emerging markets between Citroen (Asia) and Peugeot (South America and, to a lesser extent, Africa and the Middle East).
Citroen has taken the lead in China since forming a joint venture with Dongfeng Motors in Wuhan, central China, in 1992. The new plant in Wuhan has capacity for 150,000 units a year. In Malaysia, the Citroen Tiara is made by local manufacturer Proton. It is based on the AX. Production of 20,000 Tiaras is planned for 1997.
Peugeot has been the leader in South America. It has a strong Argentine base through its partner, Sevel, and it has smaller operations in Chile, Uruguay and Ecuador.
There have been exceptions. Peugeot set up a joint venture in Guandong, China, in 1986, well before Citroen. Peugeot's project has been a major disappointment, while Citroen's Wuhan operation is one of China's national car projects. It is defined and supported by the central government.
Peugeot also has a joint venture in India with carmaker Premier to make 309s in Bombay. Citroen ZXs are assembled in Uruguay, and in 1996 Sevel began selling Citroen models along with Peugeots.
Now PSA wants to integrate the two brands even more in both China and Brazil.
'We wish to consolidate our forces in Wuhan in order to produce both Citroens and Peugeots there,' said Calvet. 'It will take some time to achieve.'
Peugeot has been planning a withdrawal from its China joint venture, which assembles 505 and 504 pickups. Peugeot owns 22 percent.
'We will go on making cars in Guandong but the equity split will change,' said Yves Barbe, Peugeot deputy general manager in charge of international affairs. 'The real question is whether to introduce a new, modern vehicle in Wuhan, probably a Peugeot, when the Chinese market allows us to do it.'
In South America, two projects are under way. In Brazil, PSA will decide very soon where it will build an assembly plant. 'We are close to pulling it off,' said Calvet.
Talks are going on with Brazilian government officials about the financial arrangements. Calvet said the plant would have capacity for 70,000 units per year.
'It would be able to make two models, one Citroen and one Peugeot,' he said.
Investment will be limited.
'I hope we will not go beyond $600 million,' said Barbe. 'We want to be innovative in the manufacturing operation by saving money in some areas, like the paint shop. We will add a components plant later.'
In Argentina, PSA is negotiating to take a minority stake in Sevel, owned by the local Macri family. Barbe said the family has proposed that PSA take 15 percent. Sevel makes 405, 504 and 306 sedans in its Palomar and Berazategui plants near Buenos Aires. It may add the Berlingo/Partner commercial van.
Under the new set-up, a sales manager from PSA would take over the sales strategy of both Peugeot and Citroen in Argentina.
In 1996, PSA sold 83,000 passenger cars and light commercial vehicles in South America, including 70,000 Peugeots and 13,000 Citroens. About half the sales were in Argentina.