Automotive News Europe - August 2019 - 7

AUTOMOTIVE NEWS EUROPE

‚ÄČ

COVER STORY

PSA takes plant
efficiency
'to another level'

C

ritics of PSA Group's acquisition
of Opel/Vauxhall said Carlos
Tavares would have to either lay off
thousands of workers, close plants
or do both to make the former General Motors unit profitable. Two years
later, Opel's workforce has been reduced only by about 10 percent to
15 percent, largely through attrition
and buyouts. Capacity utilization is on
an upward trend, even though sales
volumes have dropped at Opel.

PSA aims for more profits through its new Spoticar used-car platform.
signed in 2012, had yet to bear fruit, but
it later resulted in key SUV models that
hit the European market in 2016-2017,
and laid a trust base for PSA's acquisition of Opel/Vauxhall from GM in 2017.
European consumers were poised for a
four-year car-buying binge that erased
the losses from the 2008 recession and
2012 "double dip."
Even if Tavares was able to hit the
ground running at PSA, analysts praised
him for his leadership qualities, operational efficiency, and discipline in
reducing complexity and focusing on
improving pricing. "There is a long list
of executional decisions that have been
strong," Morgan Stanley analyst Harald
Hendrikse said. "Having not had as
much capital available as, say VW, PSA
has been forced to make some more intelligent choices."
Said Denis Schemoul of IHS Markit: "The
recipe isn't genius. The fact is that he can
execute on it as a leader. If you talk internally to people at PSA they are so glad
to have someone who provides organization and leadership vision. That was a big
change." Tavares has managed to get
people behind him "even with some disruptive changes," Schemoul said.
In person, Tavares is direct and approachable, with little of the "great man" mystique attached to powerful CEOs. He flies
on discount airlines and stays in budget
hotels. Away from the office, which he
says gets 100 percent of his time from

AUGUST 2019

8 a.m. to 6 p.m., his passion is vintage
racing, whether it's a 1980s Formula 3,
a rally-prepped Peugeot 104 or sharing
the driver's seat in a thundering Lola T70.
"He flies on low-cost airlines because he
believes in it," Schemoul said. "He is applying to the whole organization some aspects of his personality. That's probably
one of the reasons why people tend to
follow him -- they can see that he's genuine." Yet Tavares' racing exploits point
to a fierce competitiveness. In recent
years he has referenced Charles Darwin
and the principle of natural selection to
describe the seismic changes starting to
appear in the auto industry. "We are agile
because we faced a near-death experience," he said last year. "We are Darwinian. We know that the survival of our company is based on our ability to adapt."
Tavares has increased the metabolism
of PSA, analysts said, including pushing
for real internal competition among factories for product allocations. "He has definitely turned the organization around in
terms of excitement, willingness to work,
the ability to believe that PSA can win,"
said Philippe Houchois of Jefferies. "That
didn't exist for 20 years."
Tavares has hired talent from his former
employer, Renault, most recently Thierry
Koskas as head of sales and marketing,
and Alain Raposo as head of powertrain,
battery and chassis engineering. Earlier,
Olivier Bourget, executive vice president
for programs and strategy, and Yann Vincent, industrial director, joined. "The years

PSA assembly plants are running at
about 75 percent capacity on average, just inside the margin considered
to be profitable, said Justin Cox, a
production analyst at LMC Automotive. By 2022 that rate is projected to
increase to 85 percent, a figure that
will be reached through "repatriation"
of models that had been built elsewhere or by other automakers under
contract or through joint ventures,
Cox said.
Among the models that are expected
to help fill PSA factories in Europe are
the Opel/Vauxhall Mokka X, a strongselling small SUV with an average annual volume of about 150,000. The
Mokka X had largely been produced at
GM's factory in Bupyeong, South Korea. The next Mokka will have a PSA
architecture and will likely be built in
Poissy, France.
Production of Opel's revamped light
commercial van lineup, including the
Combo, Vivaro and Movano, is being
transferred to PSA factories, with the
Combo added to plants in Portugal
and Spain; the Vivaro at Luton, England; and the Movano eventually going
to Gliwice, Poland. PSA will supply versions of its compact vans to Toyota,
deepening the collaboration between
the automakers in Europe.
"At first I thought Tavares would have
to do drastic surgery on his footprint
because he has too many factories
that are not making enough cars," Cox
said. Tavares has a plan to boost ca-

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Automotive News Europe - August 2019

Table of Contents for the Digital Edition of Automotive News Europe - August 2019

Contents
Automotive News Europe - August 2019 - Intro
Automotive News Europe - August 2019 - Cover1
Automotive News Europe - August 2019 - Cover2
Automotive News Europe - August 2019 - 3
Automotive News Europe - August 2019 - Contents
Automotive News Europe - August 2019 - 5
Automotive News Europe - August 2019 - 6
Automotive News Europe - August 2019 - 7
Automotive News Europe - August 2019 - 8
Automotive News Europe - August 2019 - 9
Automotive News Europe - August 2019 - 10
Automotive News Europe - August 2019 - 11
Automotive News Europe - August 2019 - 12
Automotive News Europe - August 2019 - 13
Automotive News Europe - August 2019 - 14
Automotive News Europe - August 2019 - 15
Automotive News Europe - August 2019 - 16
Automotive News Europe - August 2019 - 17
Automotive News Europe - August 2019 - 18
Automotive News Europe - August 2019 - 19
Automotive News Europe - August 2019 - 20
Automotive News Europe - August 2019 - 21
Automotive News Europe - August 2019 - 22
Automotive News Europe - August 2019 - 23
Automotive News Europe - August 2019 - 24
Automotive News Europe - August 2019 - 25
Automotive News Europe - August 2019 - 26
Automotive News Europe - August 2019 - 27
Automotive News Europe - August 2019 - 28
Automotive News Europe - August 2019 - 29
Automotive News Europe - August 2019 - 30
Automotive News Europe - August 2019 - 31
Automotive News Europe - August 2019 - 32
Automotive News Europe - August 2019 - 33
Automotive News Europe - August 2019 - 34
Automotive News Europe - August 2019 - 35
Automotive News Europe - August 2019 - 36
Automotive News Europe - August 2019 - 37
Automotive News Europe - August 2019 - 38
Automotive News Europe - August 2019 - Cover3
Automotive News Europe - August 2019 - Cover4
Automotive News Europe - August 2019 - S1
Automotive News Europe - August 2019 - S2
Automotive News Europe - August 2019 - S3
Automotive News Europe - August 2019 - S4
Automotive News Europe - August 2019 - S5
Automotive News Europe - August 2019 - S6
Automotive News Europe - August 2019 - S7
Automotive News Europe - August 2019 - S8
Automotive News Europe - August 2019 - S9
Automotive News Europe - August 2019 - S10
Automotive News Europe - August 2019 - S11
Automotive News Europe - August 2019 - S12
Automotive News Europe - August 2019 - S13
Automotive News Europe - August 2019 - S14
Automotive News Europe - August 2019 - S15
Automotive News Europe - August 2019 - S16
Automotive News Europe - August 2019 - S17
Automotive News Europe - August 2019 - S18
Automotive News Europe - August 2019 - S19
Automotive News Europe - August 2019 - S20
Automotive News Europe - August 2019 - S21
Automotive News Europe - August 2019 - S22
Automotive News Europe - August 2019 - S23
Automotive News Europe - August 2019 - S24
Automotive News Europe - August 2019 - S25
Automotive News Europe - August 2019 - S26
Automotive News Europe - August 2019 - S27
Automotive News Europe - August 2019 - S28
Automotive News Europe - August 2019 - S29
Automotive News Europe - August 2019 - S30
Automotive News Europe - August 2019 - S31
Automotive News Europe - August 2019 - S32
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