So says Frost & Sullivan’s programme manager, Martyn Briggs, following the carmaker’s announcement of a net loss of €5bn for 2012, compared with a €588m profit a year earlier.

Mr Briggs hightlights that regional losses have been reported at many OEMs, including Fiat, Ford and GM but adds that the difference between these carmakers and PSA Peugeot Citroen is their exposure to Europe, with the majority of PSA cars (approx. 62% in 2012) sold in Europe on the one hand, and limited international partnerships/alliances on the other, resulting in an overall operating loss to be reported by PSA in 2012.

As a result, Frost & Sullivan says that PSA needs to consider many things, in order to make a return to profitability, such as:

• ‘Cutting capacity/costs: closing plants and making redundancies. They have announced a plant closure in Aulnay and other measures that will amount to 8,000 job losses.’
• ‘Expand the global footprint: selling more cars in emerging markets. The plan is to increase sales outside of Europe from 38 per cent of group sales in 2012 to at least 50% in 2015; the primary focus is Latin America, Russia, and China. The partnership with GM may allow further in roads to Russia/Latin America, where it is rumoured joint developments will take place, and they have their own growth trajectory plan to increase market share in China to 5%.’
• ‘Industry partnerships: leveraging partners in strategic growth markets, but also to generate cost savings in loss making Europe. The alliance announced with GM last year is starting to become clearer, and they are due to share three platforms in Europe (including the new Zafira/3008), and potentially expand the collaboration to international product development and purchasing. This alliance is set to result in a $2bn annual savings for GM/PSA combined.’
• ‘Shift to more profitable segments: PSA compete increasingly in lower (A and B) segments which are less profitable and more cost competitive. There is a focus to sell proportionately more cars in higher (C and D) segments, as well as crossovers such as the 2008 and 3008, and sports vehicles such as the RCZ to increase profitability as well as to attack new market segments to take market share.’