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Losses force Peugeot- Citroen into cutbacks

04 December 2013, 15:27

Paris - As it struggles to rein in losses, PSA Peugeot Citroën is cutting back sharply on investment. Research and development is due to fall to well below 3 billion euros ($4 billion) in 2013 - less than one-fifth of rival Volkswagen's budget.

The crisis could draw a line under more than a century of automotive innovation at the firm, which began with a steam-powered three-wheeler - an imaginative leap by what was then a manufacturer of assorted tools, pepper mills and coffee grinders.

Here's a look at some highs and lows of PSA's two iconic French brands:

* FRONT-WHEEL PIONEER - Traction Avant, 1934-57

André Citroën founded his own carmaker in 1919, three decades after Armand Peugeot's steam tricycle experiments, and 55 years before their companies were combined in PSA Peugeot Citroën. Citroën's 1934 Traction Avant was the first steel monocoque production car to bring front-wheel drive to the European mass market. Citroën launched several variants over the model's long lifespan and produced more than 760,000 of the vehicles in total.

* STRIPPED-DOWN CHIC - Citroën 2CV, 1948-90

The rustic Deux-Chevaux was named for its horsepower tax rating - its actual engine power was closer to nine. The car combined radically distinctive looks with design simplicity, making it one of the longest-lived models in automotive history alongside such classics as the Mini, Fiat 500 and Volkswagen Beetle. Over more than four decades, Citroën produced more than 8.7 million 2CVs.

Citroën executives regularly invoke the 2CV today as the brand prepares to draw on the same spirit of spartan innovation. The frugal flair embodied by the C-Cactus concept car, unveiled at the 2007 Frankfurt motor show, shows how.

* SCI-FI SOPHISTICATION - Citroën DS, 1955-75

The DS, whose name is a play on the French word for 'goddess', was developed by André Lefèbvre as a successor to the Traction Avant, with contemporary science fiction-inspired styling that reflects the designer's aeronautical background even more clearly than the earlier car's curves.

But the real innovation lay beneath the bodywork in Citroën's pioneering use of hydraulics - backed by pneumatic cushions - to create a suspension system that kept the car cruising at the same height above the road, regardless of load. The uncanny marriage of a "magic carpet" ride with precise handling persuaded Rolls-Royce to license the system for its 1965 Silver Shadow.

Charles de Gaulle credited those same hydraulics with saving his life, when a group of would-be assassins machine-gunned the French president's DS in a 1962 ambush. The car, which had no armour plating, made a high-speed escape with two tyres blown out.

* RELIABLE ROADHOGS - Peugeot 404 and 504, 1960-1983

The 404 and its successor the 504, styled by Italian design house Pininfarina, earned a global reputation for outstanding reliability. In Africa, the 504's high clearance, deep suspension travel and rugged construction still make it a common sight. Peugeot stopped building the 504 in 1983, but licensed production continued in Kenya until 2006.

* THE FRENCH PORSCHE - Citroën SM, 1970-75

Citroën bought Italian sports car maker Maserati in 1968 and two years later stuck its neck out with the SM, a GT sports car that combined the French manufacturer's advanced suspension with Maserati's V6 engines - threatening to give the likes of Jaguar and Porsche a run for their money. But fuel prices soared in the wake of the 1973 oil crisis. Citroën discontinued the SM and sold Maserati to an Argentinian racing driver in 1975.

* BACK IN THE GAME - Peugeot 205, 1983-98

By the late 1970s, Peugeot's finances were on the brink, weighed down by debts incurred in the takeover of Chrysler's European operations. The company needed a hit and got one: The 205, launched in 1983, was an immediate success and was crowned car of the decade by the UK's Car magazine seven years later.

Its sporty exterior styling and punchy diesel engines made it remarkably popular for its supermini category. Among the innovations that sealed its success was the compact suspension, which delivered firm handling without intruding into the boot space.

* STREETS AHEAD - diesel particulate filter

The additive diesel particulate filter (ADPF), patented by Peugeot, was the first mass-market filter to remove virtually all the soot particles from diesel exhaust. Its introduction in 2000 stole a march on German rivals just as European consumers were clamouring for the technology. The Peugeot system has been installed on close to 7 million cars.

* MISSED OPPORTUNITY - Renault Espace, 1984

Matra Automobiles, a now-defunct French company that made cars for the Simca brand, came up with a pioneering minivan design and in 1979 pitched it to Peugeot, which had bought Simca as part of Chrysler's European assets. Peugeot turned it down. Renault did not. The Renault Espace, whose unprecedented roominess and graceful ride drew comparisons with France's TGV trains, went on to notch up more than 1.2 million sales over four model generations.


Unveiled as a prototype in January this year, Peugeot's Hybrid Air system recovers energy when braking or decelerating and literally stores it in a bottle, in the form of compressed nitrogen. That generates fuel savings of as much as 30 percent in urban conditions, says the company.

The technology, jointly developed with German supplier Bosch, is rugged, affordable enough for developing countries, and cheap to maintain. But Peugeot lacks the scale and resources to shoulder the 500 million-euro development and production costs alone, it says.

- Reuters


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