Abstract

The automotive market experiences unprecedented competition levels, the major car markets like Europe and North America are stagnating. The industry is facing lower profit margins especially in the compact and subcompact categories and is impacted greatly by financial crises. This case focuses on the French car manufacturer PSA that sells cars under the Peugeot, Citroën and DS automobile brands. PSA group is owned by the French state, the Peugeot family and the Chinese Dongfeng Motor Group with 13.68% shares each. This case highlights the struggle of PSA in international markets and its strategies in the competitive automotive market. PSA sales in Europe contribute to 60% of its revenue. After facing near bankruptcy three years ago, the group decided to acquire General Motor’s European operations- Opel and Vauxhall in March 2017 in a $2.3 billion deal. The deal will help the French firm become Europe's second largest automaker by car sales (3 million) only behind Volkswagen (3.9 million cars). The group is still facing many issues like a rapidly declining sales in China, low sales of its premium DS line and the group is lagging behind in the electrical and hybrid segments.

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