PSA/Peugeot-Citroen's European sales grew as a slower pace than the overall market last year, but the French automaker isn’t worried because after flirting with bankruptcy in 2013, profit is the priority at PSA, not volume. PSA Europe boss Denis Martin explained why in a recent interview with Automotive News Europe France Correspondent Bruce Gain.
European sales rose by more the 9 percent last year while PSA's volume was a little behind with 6 percent growth. What do you expect in 2016?
Our first priority is not only volume, it is implementing Back in the Race [PSA's 2-year-old revival plan]. Back in the Race was the most important thing for PSA in 2015. This involved the reduction of fixed costs and bringing production costs down as much as we could in Europe. But, at the same time, we were also focused on market share and volumes. In 2016, we need to be very focused on our different markets and channels, as well as on our customers. I can say that our three brands – DS, Peugeot and Citroen – have the entire car market covered. We also have one person in charge of each country. Therefore, we are very focused on the business, profits and distribution network in each market in Europe.
So you expect PSA's European sales to rise in 2016?
We have been the second-largest carmaker in Europe for quite some time, and it is very important to grow in each country in Europe. The results have been good in France, Spain, Portugal and Italy, as well as in the Netherlands and in Denmark. In several countries in Europe, we are seeing profitable growth. We want to achieve that in each European country. Our priority is profit.
Will PSA reduce capacity again this year in Europe?
We reduced capacity at [France plants in] Mulhouse and in Poissy last year. Now we will focus on making our plants more flexible. There are no plans to further reduce capacity in 2016.
Does PSA need fewer dealerships?
We need to concentrate on our dealerships. They know exactly what we want and the most important thing is customer engagement. It is not a question of reducing the number of dealerships, although we certainly need fewer of them, but it is more a question of performance. We want to see Peugeot, Citroen and DS brand dealerships. We will continue to develop the DS brand dealerships, but we plan to do that, of course, through the Citroen brand network.
Has there been any fallout for PSA because of Volkswagen Group's emissions-cheating scandal?
We have no comment about Volkswagen. What I can say is that our emissions are the lowest in Europe.
Are future CO2 and NOx emissions limits and real-word emissions tests proposed by the EU too tough?
We will more than just comply with tougher regulations. Also, we really need to be more and more transparent. We need to be transparent to remain compliant with regulations, of course, but we also need to be very transparent for the consumer. We need to clearly explain to them how the regulations work and how different driving modes affect consumption, such as whether they are driving in sports mode versus when they are driving with their family.