Peugeot Doesn’t Really Deny The Deal
Deutsche Bank Sees Little Point In An Alliance
Peugeot-Citroen’s decision to buy Mitsubishi’s i-MiEV battery powered car set the rumour mill buzzing that the French company might be planning a deeper alliance with the Japanese.
Peugeot didn’t really shoot the report down, with a spokesman saying there was nothing new about the story, published in the French daily newspaper La Tribune. New CEO Philippe Varin has said he was interested in partnerships and alliances with other companies to stimulate the company’s growth.
Peugeot and Mitsubishi already make cars together in Russia. Mitsubishi makes the Peugeot 4007 and Citroen C-Crosser based on its Outlander SUV.
Deutsche Bank wasn’t very enthusiastic about the idea of a deeper alliance.
“We believe a deeper alliance would have some positives since both groups have a complementary line up, with Mitsubishi being strong in mini cars even if loss making in SUVs, and a complementary country mix,” Deutsche Bank said in a report.
The bank said Mitsubishi was a very small player in Japan and in the U.S. where it lost money, and had a very small, unimpressive R&D ratio.
“Lastly, Mitsubishi needs to reverse a sharp revenue decline, down 45 per cent in two years. Overall, we don’t see any positive catalysts in Peugeot-Citroen taking a stake in Mitsubishi Motors,” Deutsche Bank said.
Peugeot expects to lose between €1 billion and €2 billion in 2009. It recorded a net loss of €962 million in the first half, compared with a net profit of €733 million in the same period last year before the industry was engulfed in a sales crisis. The value of sales was down by a fifth.
Neil Winton – September 15, 2009