New chief executive at Peugeot Citroen has announced a long-term recovery plan to return the French car manufacturer to profit by 2018.
Carlos Tavares revealed a scheme called Back in the Race, which he assures will reverse losses in Europe and emerging markets. The scheme is said to draw on the company’s recent rescue by Chinese investors.
The plan will achieve this by cutting costs, reducing excess plant capacity and the number of models on offer.
The firm has toiled of late with the shrinking European car market, with sales decreasing 5.4% while the global market increased by 4.2%.
Following a loss of more than €7.3bn (£6bn) in two years, Peugeot Citroen were bailed out in February as part of a €3bn cash infusion, selling two 14% stakes of the business to the French government and China’s Dongfeng motor group.
Though investors are pleased at the positive earnings target, they are concerned at the magnitude of the project.
Barclays analyst Kristina Church said: “While they see themselves as back in the race, they don’t seem to realise that the competition is moving forward just as quickly.”