iNVEZZ.com Monday, November 25: Peugeot Citroen (EPA:UG) is interviewing candidates to replace chief executive Philippe Varin, after Chinese partner Dongfeng suggested that the deeper alliance currently under negotiation should be accompanied by management change, it’s been reported.
Varin himself is leading the search for a successor with the experience and necessary skills to lead a global car-making alliance. Reuters quoted a source close to the matter as saying: “The request regarding the succession came from Philippe Varin with the agreement of the supervisory board. The aim is to ensure the long-term continuation of the strategy Varin is leading.”
According to other sources, Peugeot is considering former Renault (EPA:RNO) chief operating officer Carlos Tavares to replace Varin. Tavares, who left Renault three months ago, would join Peugeot as the car-maker struggles to swing back to profit, reduce costs and grow outside Europe. “The market would definitely welcome the arrival of Tavares,” said Jose Asumendi, an automotive analyst at JPMorgan, as quoted by Bloomberg. “He is a highly regarded manager. After working for some time with Varin to understand the dynamics of the group, he would be an excellent candidate to lead the transformation of PSA.”
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Under Tavares, Renault reported unexpected growth in first-half profit as labour-cost reductions and higher car prices offset a slump in demand. When Tavares headed North America for Nissan, 43 percent owned by Renault, he helped the unit deliver ¥209 billion (₤1.27 billion) in profit in the year ended March 2010, turning around a ¥46.7 billion (₤283 million) loss in 2009.
Peugeot and Renault to benefit from Iran agreement
Peugeot and Renault will receive a much-needed boost from the 11th hour deal over the weekend which will see removal of some of the sanctions on Iran.
The two French car-makers had sold more cars in Iran than any European competitor before the sanctions forced them to halt the trade. Bloomberg quoted Erich Hauser, an automotive analyst with International Strategy & Investment Group, as noting that “Peugeot and Renault are potentially the biggest beneficiaries among European car-makers.” But, Hauser continued, “for the car industry to really recover financing for exports needs to be available, so sanctions in banking would have to ease as well”.
In 2011, Peugeot sold about 458,000 vehicles in Iran, which made the Islamic Republic the second-biggest market for the company after France. Chief financial officer Jean-Baptiste de Chatillon commented last year that the trade restrictions had slashed €10 million a month from operating profit.
Peugeot shares surged by as much as five percent to €10.74 this morning UTC, while Renault advanced 2.2 percent to €65.82.
As of 11.27 UTC buy Peugeot shares at €10.71
As of 11.27 UTC sell Peugeot shares at €10.70
As of 11.27 UTC buy Renault shares at €65.34.
As of 11.27 UTC sell Renault shares at €65.30.
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