CARLOS TAVARES
Car-industry machinations that are worthy of The Bard
The plot has a Shakespearean ring. A bold prince reinvigorates the kingdom of central France, which then forges an alliance with a troubled oriental nation. Before long, our man is king, ruling unchallenged over the entire allied lands. Eventually, one of his young dukes, after winning battles across the territories, prematurely voices an ambition to ascend to a throne of his own. The old king takes this as treachery and, having lost none of his potency, swiftly banishes the pretender. Curtain, interval drinks. At the start of Act Two, a plot twist. It emerges that in obliging him to depart, the king is actually obliging the youngster’s ambitions. Eastern France bestows on him its troubled crown, and he immediately joins battle against his former compatriots.
The backdrops to this performance are Renault, Nissan and Peugeot-Citroen, the characters being Carlos Ghosn and Carlos Tavares. Tavares it was who last summer, as number two to Ghosn at Renault, ventured in an interview that one day he’d like to be in sole charge of a car company. Ghosn offed him for it. Peugeot-Citroen was in such trouble, it risked taking on the fiery Tavares as its own chief executive.
People in struggling car companies tend to say that ‘they’re like supertankers, they take ages to turn around’. But actually a clear-eyed and inspiring new boss can go through the place like a dose of salts and get results within months. First, they stem the losses, then invest money, and better cars start emerging. That’s exactly what Ghosn himself did at Nissan in 2001.
Carlos Tavares joined a Peugeot-Citroen that had lost north of £5 billion in two years and become a national disgrace. It was closing its huge factory on the outskirts of Paris. To keep afloat, it sold substantial shares in itself to Dongfeng of China, and the French Government.
“People here are great but were fed up with being in crisis,” Tavares tells me. “They’d been working like hell, but all they got was red ink. So they were in listening mode, ready for suggestions.” Amazingly quick results came from boring admin – cutting inventory, improving logistics and making the factories run more efficiently. They get more money for the same car by cutting the list price but refusing to discount too much. Tavares admits that last lesson came from running Dacia.
They’re the quick wins that have already killed the losses. But, y’know, yawn. There’s a limit to my interest in all this housekeeping. What about the actual cars? Well, Peugeot was already turning the corner, and he hasn’t ripped up that plan. Citroen too – see the Cactus.
Strikingly, though, Tavares has made DS into a separate brand. “It will disconnect from Citroen,” with separate management, soon separate forecourts. And then its own family nose design, naked of the chevrons. DS will have a six-car range, including a biggish SUV. It will be the most expensive of the three brands, with Peugeot next and Citroen at the value end.
Tavares wants to set DS against the premium Germans, but with a different sort of car. “I will not fight the Germans with the same weapons. DS will convey the French touch – sophistication, fashion, elegance, creativity, our way of life that makes the Brits come here for holidays.” I interrupt him: we’ve heard exactly this before, at the launch of the Renault Vel Satis and Avantime, the Citroen C6 and, poignantly, the DS5, which sells tiny numbers. Overall, DS still sells just 120,000 cars a year – Mini is nearly three times more. He’s unfazed: “Infiniti was created in 1989, and 10 years after it was selling 150,000 a year. But after 20 years, I was in charge of it in the US, and we overtook Audi there. I have to be patient with DS. This is a 20-year story.”
This is the time-frame of so many Shakespeare plays, of course. But will the tale of Tavares end up classified among the histories, tragedies or comedies?
“People here are great but were fed up of being in crisis”