Auto blogMon, 11 Feb 2013 17:58:00 EST
As Europe's economy continues to suffer, so do automakers. One of the latest pieces of bad news comes from French carmaker Peugeot which says it will write down its assets by $5.53 billion. The figure represents almost 29-percent of the company's property, valued at $19.4 billion in June. Peugeot says it will also take a second-half charge of $325 million for "onerous contracts." Speaking of onerous, The Detroit News notes the "write-downs are more than double Peugeot's current market value." Yipes.
"This calculus results from cautious assumptions about the European economic environment," Chief Financial Officer Jean-Baptiste de Chatillon is quoted as saying in the article. "We think that this European car market will remain affected by the crisis for a long time."
With European auto sales falling the most in almost 20 years, Peugeot executives see little chance of improvement. Peugeot's sales dropped 13 percent in 2012 and Chatillon said markets could fall another 5 percent this year.
First we saw the Urban Crossover Concept at the Beijing Auto Show, a small high-rider from Peugeot that was a product of the company's design studios in Paris, Shanghai and São Paulo. That evolved into the Peugeot 2008 concept and a liquid lime paint scheme at the Paris Motor Show a few months ago, now the French firm has unveiled the production version of the B-segment crossover that's an offshoot of its 208 hatch.
At 13.6-feet long, the 2008 is about six inches longer than the 208, or two inches longer than a Mini Countryman, and it has been tuned to provide the drive of a hatchback with the stance and utility of a crossover. That stance will be set up by punched-out wheel arches covering either a set of 17-inch alloys or a "mud-and-snow" kit for the truly rugged urban animal. Utility will come via the low-loading level in back, black bumpers and side sills, and extra headroom from the double-bubble roof (there's a panorama option, too). The studios chosen to create it weren't chosen at random, the 2008's production and main markets planned as France, China and Brazil.
The engines will include three-cylinder gas units and Peugeot's e-HDi diesels. It will be shown at this year's Geneva Motor Show before it goes on sale in late summer. The press release below can tell you more about it until then.
Recently, the finance arm of PSA/Peugeot-Citroën was in such debt trouble that it was pricing itself out of the car loan market. The rates it was paying to service its debt, which was rated one step above junk, were so high that it was forced to charge car-buying customers higher rates than they could find elsewhere. This was adding to Peugeot's already impressive woes by sending revenue out the door to competitors.
Two months ago a deal was worked out with the French government whereby the state would provide 7 billion euro ($9 billion USD) in bonds to guarantee the finance arm's loans. The French government could nominate someone to join the Peugeot board, Peugeot would guarantee more French jobs, and on top of that deal, other banks would provide non-guaranteed loans. The government would take no equity stake in the car company.
Although not yet finalized, the arrangement is meant to create some breathing room for Peugeot Finance to lower its interest rates for customers, and a government-nominated board member, Louis Gallois, was recently named to Peugeot's supervisory board. The arrangement was also openly questioned by at least three competitors: Ford, Renault - which is 15-percent owned by the French government after it received state aid - and the German state of Lower Saxony, itself a 15-percent shareholder in Volkswagen.
In 1939, Vensio Pagani's father packed his family up and fled war-torn Italy for France, leaving everything behind in the process. The family home, friends and even his father's prize Peugeot convertible were all abandoned in the hope that the Paganis could find a safer future for themselves.
Vensio cultivated a passion for restoring period vehicles over the intervening 70 years, and happened to spot a vintage Peugeot just like his father's at a swap meet. The car was in pieces and badly in need of restoration, but Vensio drug it back to his shop and began rebuilding the car from the ground up.
It wasn't until he cleaned off the frame that he noticed something special. After scratching back the rust, grime and paint of seven decades, Vensio discovered that the serial number of the car he purchased matched his father's - amazingly, he had found his dad's long-lost Peugeot. Our friends at Petrolicious took the time to speak with Vensio in his workshop for their latest video. You can take a look at it below.
There have been many great car commercials over the years, but is it possible to define the best? Well, Ad Week recently took a crack at it by rating the top commercials of the year by looking at their view counts on YouTube, but Auto Express took a more democratic approach by putting the decision to a vote. Just after Thanksgiving, Auto Express came up with a list of the 20 popular commercials, and it tasked its readers with choosing the winner for the best car ad of all time. The winner? Honda's 2003 commercial for its then-new European Accord titled "The Cog."
While the ad never aired in the US, most car people have surely seen the impressive Rube Goldberg-style spot. In fact, the only commercial on this list that we saw on US television was the Volkswagen ad "The Force," but many of the others have become viral videos, including transforming and dancing Citroën C4. Of the 19 other commercials that vied for the title of best ad of all time, only the Ford Puma "Steve McQueen" commercial gave Honda a run for its advertising money.
Scroll down to watch Auto Express' top five commercial in order and to check out a press release, then let us know some of your favorite car commercials in Comments.
Even if their avant-garde styling has historically meant that they would never enjoy the sales success of their more staid German counterparts, it was always somehow comforting to know that the French were building large sedans. With a history of nontraditional looks and peerless ride quality (a legacy built on the hydropneumatic suspension of the original Citroën DS), big French cars have always been an acquired taste.
And now it appears buyers with that specific palette won't have a clear place to go, at least for a while. According to Automotive News, production of the Citroën C6 shown above (click to enlarge) is scheduled to cease this month, leaving French buyers (and Francophiles) without a true-bleu option. As the article points out, Renault will still offer its Latitude - effectively a badge-engineered rework of the Korean-built Samsung SM5 - but patriotic consumers have apparently been staying away because it isn't French enough (Renault has sold under 3,800 examples this year).
Renault may yet provide an answer for its displaced countrymen in the form of a new Initiale Paris-branded flagship offering that would be developed on Mercedes-Benz E-Class britches, but it has not yet decided whether it will move forward with the car. The alternative, to follow Citroën and Peugeot in leaving the segment, is probably looking quite appealing now, especially with Europe's continued economic malaise.
Peugeot has announced it will cut 1,500 jobs by 2014 as the European Union economy continues to falter. Bloomberg reports the layoffs join a further 8,000 announced back in July, and will be made by simply not replacing workers who leave. All told, the French automaker wants to slash its current workforce by 17 percent, or around 11,200 positions, by 2014, while also shuttering a facility outside of Paris and working to build strategic alliances with manufacturers like General Motors. Workers have been told the company's overall workforce will decline to 55,900 individuals in 2014. Even with those moves, analysts predict next year will one of the hardest for Peugeot in recent memory.
While 2012 saw the automaker liquidate some assets to maintain its cash reserves, that won't be an option next year. The company has been burning through those funds at a rate of around 200 million euros per month, and has announced its net debt will be somewhere around 3 billion euros at the end of 2012. In response, Moodys cut the automaker's long term debt rating to three levels below investment grade. In October, the French government voted to give Peugeot up to 7 billion euros in new bonds, and the measure should be fully adopted by December 19.
Peugeot-Citroën (PSA) and Renault were both the targets of autoworker strikes on Thursday, the result of ongoing tensions between labor and management in the wake of planned facility closings in 2014.
3,000 French jobs stand to be lost in less than two years when the PSA's Aulnay plant executes a planned closure of a production line. The line in question currently builds Citroën's C3 subcompact model.
Negotiations are reportedly still underway, with PSA pledging to offer jobs elsewhere to about half of the Aulnay workers that stand to be laid off.
The partnership General Motors (via Opel) and PSA Peugeot/Citroën began in February has produced more declarations and revisions than easily identifiable positive movement. A deeper collaboration between Opel and Peugeot has been mentioned a few times, perhaps even a sale of one to the other, and a report in October laid out joint plans like a small MPV for Opel/Vauxhall, a small car for both Opel and Citroën and two new platforms for small and midsize cars.
What observers can't glean from the proclamations is how all this can happen with Peugeot in constant, and worsening, financial trouble. The French company just accepted a bailout from the French government, the cash position at its lending arm so bad that the interest rates it had to charge were pricing it out of the car-loan market, and a new report in Reuters says that Peugeot is losing $200 million per month.
That cash-burn rate is better than a few months ago, but the Reuters report explains that the French government loan is "sabotaging" any chance of a closer tie-up between the two companies, said to include the possibility of "a full combination of Peugeot with GM's European unit Opel." That particular option, with a $5-billion buy-in from GM, could have allowed GM to get Opel off its books by making it part of a separate entity. The French government's terms for the loan, however, mean that Peugeot can't shed workers and factories as it would need to in order to make the new entity, and any deeper ties with Opel, viable.
New details have emerged this morning regarding a partnership between General Motors and PSA Peugeot-Citroën. Following talks that started back in February, the American and French automakers will apparently team up to develop several vehicles, including a small MPV for Opel/Vauxhall and a compact crossover for Peugeot. Also planned is a small car for both Opel and Citroën.
Additionally, the two companies will co-develop a low-CO2-emitting small car platform to underpin the next generation of Opel and PSA models. The detailed plans call out a midsize platform to be shared between Opel/Vauxhall and Peugeot/Citroën.
As much as $2 billion in savings are expected in the next five years as a result of this venture. In a statement from GM and PSA, "All four projects will be developed combining the best platform architectures and technologies from alliance partners."