It’s survival of the fittest
PSA’S boss gives a frank assessment of the challenges facing the motoring industry
PSA boss Tavares speaks
As head of the PSA Group, which comprises Citroën, DS, Peugeot and Vauxhall/opel, Carlos Tavares is one of the most powerful figures in the car industry.
Tavares also serves as chairman of the European Automobile Manufacturers Association (ACEA), so his views on a variety of issues have a major impact on the industry.
Autocar caught up with Tavares on a range of topics, including PSA’S recent restructure, Vauxhall’s turnaround and his thoughts on new, tougher European Union CO2 targets.
There are reports you need to cut 100,000 jobs because of the cost of meeting emission regulations. Is that true?
“This is fake news. But more than 20,000 jobs have been shed over the past three months [across the European car industry].
“Electromobility is costly. When we’re faced with significant cost, it leads to increased prices and clean emissions become elitist. We either sell fewer cars or get fined [for missing EU emission targets]. So we have to restructure, or sell at a loss to hit the EU targets.”
Why are low-emission cars so expensive?
“The cost of batteries is not competitive. If you push the supply of batteries to Asia, the price goes up. The [EU] rules should coincide with the introduction of a European battery maker. It’s not coordinated or planned strategically. Where is the charging network investment? It’s not a 360deg approach and there’s a lack of rigorous planning. This is serious stuff – the EVS are there and for sale. These are €30,000 (£26,000) vehicles, and there’s no decent charging network. This problem is not all about the car makers.”
What is your view on the EU emission regulations introduced in October last year, requiring fleet average CO2 emissions to be reduced by 45% from 2020 levels by 2030?
“We are being held hostage by the October vote. An impact study for this doesn’t even exist. We need to protect the competitiveness of our industry. At PSA, we will survive and adapt. But when
the EU moves in a speedy way, what happens to the ecosystem of partners, suppliers and dealers? If you shift suddenly, something is going to break. People are not aware of the consequences.
“Around 40% of the total cost of an EV will move to Asia [due to batteries sourced there]. Did the EU have a mandate to send jobs to Asia? We need strategic coordination. Asking these questions is not pushing back against the regulations. Who has the big picture in mind? Where are the charging networks? What about well-to-wheel CO2? What if a different technology comes in, such as hydrogen? The money is then wasted.”
Is PSA considering any partnerships?
“We’re not looking for any. We’re generating the cashflow necessary to pay for our future – we can make enough money. But if the opportunity comes, we will consider it.”
What might create those opportunities?
“There’s going to be chaos between now and 2030. Conditions are going to be extremely selective – not all manufacturers will survive
the Darwinism, not all will master the EV track. It’s extremely exciting because the competition is going to be extremely selective. That will create opportunities for deals.”
How have you turned Vauxhallopel around so quickly?
“We brought back management – it is now managed. It’s sad to see [Opel CEO] Michael Lohscheller so heavily criticised in his own country – I don’t like it. Opel has been in the red for 50 years, it makes a profit and he gets criticised. It’s not ethical.”
Are you happy with the progress of DS Automobiles?
“Yes. We’ve sold 40,000 DS 7s, and profitability per sale is sky-high. The only thing I am not happy with is the performance in China. But fit and finish is where we want it to be.”
Why have you been struggling in China?
“The 50:50 joint-venture model doesn’t work – it produces slow decisions in a fast-moving market.”
What are the prospects for diesel now?
“Diesels are now 35% of European sales, down 8%. Germany is waking up to reasonable thinking, with less emotion. Rather than a dogmatic zero tolerance of diesels, Euro 6 can achieve an improvement by getting rid of old diesels and replacing them. That’s the pragmatic approach.”