French automotive group Peugeot-Citroën has finally managed to turn a profit, for the first time in three years and only after huge cost-cutting measures.
Two years ahead of schedule
France's largest car manufacturer had a loss of nearly 2.3 billion euro in 2013, which it managed to lower to 555 million euro in 2014. However, for the first time in three years, the group has managed an operational profit: 905 million euro in 2014, way better than the 364 million euro loss in 2013.
"We are ahead of schedule in our reconstruction plan", CEO Carlos Tavares said proudly. A collaboration with Chinese Dongfeng Motor and a new participation from the French government have helped PSA move ahead.
"Prefer more profit to more cars"
The group has sold 2.94 million cars last year, 4.3 % more than in 2013, but way below its record 3.6 million cars from 2010. Its Chinese sales have now surpassed its French sales and the company seeks further growth in that region.
Factory closures, jobs cut and a limited budget for creating new models have helped save two billion euro in three years' time. That means that the company has to sell fewer cars to break-even: 2.6 million in 2013 (excluding China), 2.1 million last year and only 2 million in the future.
"They are losing market share in Europe, but it is on purpose. Onerous models are being cut and profitable car models are now the focus", an analyst said. All in all, the company is now focusing on profit, not on car sales.