Peugeot keeps focus on Europe

PSA Peugeot Citroën plans to push its brands up-market and remain focused largely on Europe, bucking an industry trend towards low-cost cars and emerging markets, and is not ruling out a bid for Volvo.

Peugeot chief Christian Streiff on Wednesday said he had no plans to develop a vehicle like the Logan, French rival Renault’s low-priced car for emerging markets. “I don’t want to base the future of PSA on a vehicle like the Logan,” Mr Streiff told the Financial Times.

Peugeot aims to expand in Latin America, eastern Europe and China, but had no plans to reduce its focus on western Europe, and would be seeking to raise prices. “All the largest producers make money in Europe, [and] we can do this,” he said.

Asked about Ford’s possible sale of Volvo, the Swedish premium brand, Mr Streiff said he had “no comment,” adding that he was focused mainly on a three-year plan to boost Peugeot’s profitability, unveiled after he took over as head of Europe’s second-largest carmaker in February. But he added: “We are 100 per cent open to alliances and – the day we are ready – acquisitions.”

Peugeot, unlike Renault – which is allied with Japan’s Nissan – has until now shunned full-blown alliances in favour of partnerships on single products or projects with Fiat, Toyota and Ford, among others.

Ford is selling its UK luxury brands Jaguar and Land Rover and exploring its options for Volvo. BMW is understood to have looked at Volvo, which Ford could sell to focus on its US business. Peugeot or Renault are possible Volvo suitors as they have no luxury marques and ranges dominated by smaller cars.

Carlos Ghosn, Renault’s chief executive, has ruled out a bid for Volvo.

Peugeot Wednesday reported a better-than-expected 21.9 per cent rise in its interim operating income to €842m, and its operating margin rose from 2.4 per cent to 2.7 per cent. In spite of stagnant or declining markets across Europe, the carmaker increased its market share by 0.2 per cent year-on-year in the first half, to 14.2 per cent.