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PSA groups is the
French multinational automobile manufacturer which was established in 1976. Its
headquarters lies in Paris. It has become the second largest car
manufacturer having the market share of 17% in the European car market after
Volkswagen Group as
the purchase of Opel and Vauxhall is completed in 2017. (PSA group 2017) Now PSA
group has strong iconic brands i.e. Peugeot, Citroen, Opel, Vauxhall. PSA group
has sold more than 3 million vehicles in 2016. It has €54 billion revenue in
2016. PSA group is the European leader for low carbon emission (102.4 g) CO2/km.
On the other hand there are some challenges for PSA group regarding Opel’s
emission strategy which PSA group felt being cheated by General motors. (Saarinen, 2017) Similarly, PSA group
may face legal challenge by the government regarding diesel taxes and the third
challenges would be the guarantee of job security of Opel and Vauxhall group. (Saarinen, 2017) PSA group has
followed a costumer driven transformation with the push to pass strategic plan
in 2016 which makes the PSA group provide mobility services favored by its
costumer. Because of this strategy, PSA group has increased its sales for the
third consecutive year since 2014-2016 increasing the sales by 5.8%. (Annual
report 2016)

While analyzing the financial performance of PSA group in
the given chart, the price of its ordinary shares has experiences a mixed
performance since the last 10 years. The global economic crisis hit France
desperately in 2008/2009 leading its share price decreased to a low of €8.20 when PSA groups share
has fallen by 10%. Whereas in 2010, PSA group made a strong recovery gaining
the share price around €22 when
revenues go up by 15.8%. This was a turnaround in automotive profitability
recurring income of €689 million(Annual report 2010) During the beginning of
2011 to 2012 again PSA groups share price decreased dramatically leading share
price fell to the lowest of all time €3.64 because of Eurozone debt crisis.
After the alliance with the General Motors in 2012, which leverage both
companies to combine the strength and capabilities for profitability of both
partners improving their status in Europe. By 2014, PSA group again came “back
in race” recurring positive group operating free cash flow. It had made an
effective control over various risks associated with the business. By the end
of 2017, the groups share price has risen by €19.75. PSA group is now
profoundly changing the business environment in terms of technology, modes of
consumptions, and new entrants in the automotive industry.(Annual report 2016)

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