Peugeot In Trouble Over Dropping Sales And Failing Products

Peugeot sales in Europe and even Malaysia is on the decline as Volkswagen and Ford move forward with strength. Recent reports have indicated major cost cutting at Peugeot while other manufacturers are spending more on research and development and also product  and market expansions. Now fresh news has come in that Peugeot is in talks to form an alliance with a bigger car manufacturer to deal with dropping sales and harsh market conditions in Europe. “We do not exclude the possibility of accelerating what we’re doing now through a bigger alliance,” Frederic Saint-Geours, PSA/Peugeot’s head of brands, said at a news conference recently. However, he asserts that a number of conditions have to be met. Speculations have been circulating that the company is eyeing an alliance with Fiat to deal with overcapacity in the car industry. Saint-Geours said any alliance should yield real synergies while maintaining the group’s independence.
Fiat CEO Sergio Marchionne said at the Detroit auto show that the Italian carmaker may form an alliance with a third partner before launching the planned IPO of Chrysler. The possible tie-up, however, gained criticisms from some analysts. David Arnold of Credit Suisse doubts the benefits of a tie-up with PSA since the two companies “largely share the same set of problems and combining the two businesses will do nothing to address them.”