Peugeot Citroen call for help 0

Peugeot Citroen has pleaded for help from the European Union to over the current over capacity problem. At the recent Geneva Motor Show, the over production of mass European vehicles was a major topic. The European car market is deteriorating at present with plenty of work needed to be done.

The same again please

Chief Executive of Peugeot Philippe Varin said that a previous problem of overcapacity was very well dealt with by the EU before so this should happen again. “We have experience in the past, the example of the steel industry where it was a problem, it was addressed at the EU level and it was addressed very efficiently. So why don’t we draw some lessons from the past. It would be very useful.”

Demand not being met

Peugeot Citroen are currently Europe’s second largest automaker behind Volkswagen. Whereas Volkswagen are battling the current European car crisis to great effect, Peugeot are lagging behind. The main problems seem to lie with mass car producers in Europe. The General Motors brands Vauxhall and Opel are producing over 1 million more cars in factories than what meets the current demand.

Pressure from the UK

Vince Cable has had discussions with General Motors executives in order to save the Ellesmere plant, which General Motors have considered closing. At present 150 jobs are set to go at the factory, with a Welsh MP asking Parliament to put pressure on General Motors to save these particular jobs.

However it seems that after 12 years of making consecutive losses and failing to break even, General Motors seem to be insistent on reconstructing the company’s European operations. It is understood that the future of the Ellesmere plant could be decided on March 28th with strategies on how to tackle overcapacity outlined.  It is understood that there is an agreement which prevents any plants being closed before 2014.

Peugeot and General Motors

The reason behind General Motors and Peugeot teaming up was to ensure that their losses were kept down to a minimal. Part of their plan was to share car parts, vehicle platforms and eventually the overall production of cars. A 7 per cent stake in Peugeot was purchased by General Motors. On a positive note the discussions by General Motors and Peugeot could result in the Ellesmere factory being responsible for the production of new General Motors vehicles too keeping the factory alive.