Peugeot Citroen open to alliances due to poor sales 0

Peugeot Citroen is open to joining forces with another auto manufacturer according to sources. A poor performance last year in terms of sales and profits has left the French alliance with seemingly no other alternative.

Demand falling

At present the company are Europe’s second largest car producer behind Volkswagen. Demand fell in 2011 by 1.5 %. The Euro Zone crisis had a great impact on Peugeot Citroen as banks are less generous in lending out car loans across the region. European debt is currently spiralling leaving the European car market to suffer. In total the company managed to sell 1.5 million vehicles last year. Sales dropped by 6.1 % across Europe.

The right investor

Fredric Sain Geours, who is the head of the Peugeot Citroen combination, confirmed that the company are not ruling out a possible deal with another auto manufacturer.  If the deal is to go ahead, it would have to follow the companies vision and not interfere with the Peugeot Citroen alliance’s independence.

Fiat

Fiat, the Italian auto manufacturer has recently claimed that they are open to the idea of joining forces with another major car producer in order to create economies of scale. This was revealed at the Detroit Auto Show as Chief Executive Sergio Marchionne met up with Phillipe Varin, his counterpart at Citroen Peugeot in order to discuss a potential combination.

Good sales in certain regions

It isn’t all doom and gloom however. Sales over Latin America were up by 11 % with sales in China rising by 7.7 %. Russia received the largest increase in demand with sales rising by 35 %. Sales are expected to drop further in 2012. However sales across these regions are expected to prosper even further next year.

Employees

Peugeot Citroen employs 100,000 people in France and 205,000 in total across the world. Many of them will be wondering if they will indeed have a job this time next year. An 800 million Euro reduction in spending next year will inevitability mean that some staff will be cut.

If the alliance was to find the right investors, perhaps the job cuts will not be as harsh as expected.