THINK ACT

Photos: Sipa
Mr. Varin, what lessons from your
previous life in the aluminum and
steel industries have been most
helpful to you at PSA Peugeot
Citroën?
I spent 31 years in those industries
before joining PSA Peugeot Citröen.
I spent 25 years in the aluminum
business with Pechiney and six years
in the steel industry with Corus. I
learned that you have to be among
the global leaders, because if you
are not, at some point in time, there
will be difficult issues to contend
with. I discovered that at Pechiney.
When I joined Pechiney the company
had a global reach, but over time it
disappeared from the radar screen.
The company’s core business was
aluminum but it wanted to get bigger
and bigger, so it diversified into
chemicals, steel and packaging, and
that destroyed the core business. That
was the problem. With the benefit of
hindsight, the solution would have
been to keep focused on our core
business and forget about the rest.
I also learned a lot from the turnaround
we achieved at Corus. When
a company is on the bottom, it has
fantastic potential for change. In
terms of turnaround management,
I learned that things must be kept
very simple, otherwise they will not
get done.
Until 2009, you spent the whole of
your working life in the aluminum
and steel industries. Has it been
difficult to make the transition into
the automotive sector?
The first thing I did when I joined
PSA was to listen; the employees
of the Group have a huge amount
of knowledge – much more than I
had at the time. Then I focused on
simple priorities, the first of which
was to set up a leadership team. This
was critical, because the team was
essential to the company’s success.
After completing that, together with
the team and the one hundred top
managers, we defined the ambition
and the strategy we wanted for the
company. We called it our vision and
we shared it with all employees across
the company.
What is this Group’s vision for the
future?
First of all, we want to be a global
player. We want 50 % of our sales to
come from outside Europe by 2015,
compared with 34 % in 2009 and
39 % in 2010. That means reaching
critical mass in China, which is now
the world’s biggest car market, as well
as other Asian markets and Latin
America. We’ve decided to place a
member of our managing board,
Grégoire Oliver, in China, which was
a first for PSA.
ACT: PEUGEOT
PSA PEUGEOT CITROËN has undergone a massive transformation since Philippe Varin took over
as CEO of Europe’s second-largest automaker in June 2009. The Group has strengthened its
management team, invested heavily to boost its presence in China, Russia and Latin America, and
vowed to become more profitable. All of these steps are turning the proud 200-year-old French
company from a Europe-focused automaker into a global competitor capable of challenging giants
such as Toyota, General Motors and Volkswagen. Philippe Varin speaks about his leadership
traits, his vision for the Group’s future, and how he sees 2011 developing for the automaker and
the auto industry as a whole, in an interview with Roland Berger Strategy Consultants’ senior
partner Max Blanchet and Automotive News Europe managing editor Douglas A. Bolduc.
We aim to increase our share of the
Chinese market from 3 % to 8 % by
2020 and we’ll be investing more
than EUR 1 bn in production capacity
of nearly one million vehicles to
reach that goal with our Chinese
joint venture partners. In Latin
America we’re investing EUR 700 m
to increase market share from 5.4 %
to 7 % by 2015.
Secondly, we want to have a competitive
advantage, what we refer to as
being a step ahead, in areas such as
design, CO 2 , and the services we offer
to customers. Carbon reduction is
a big challenge for our industry. We
aim to meet that challenge with a
range of technologies. We think that
by 2020, electric vehicles, hybrids
and plug-in hybrids will make up
around 15 % of the market, and we’ll
have products in all of those categories.
We’ve also introduced a “mobility
credit” service for both the Peugeot
and Citroën brands, which allows
customers to choose what mode of
transport they want – be it a bicycle
or seven-seater car – and when they
want it. In the near future, by which
I mean next year, we aim to produce
one million cars with CO 2 emissions
of less than 120g/km.
What are your plans in terms of
operational efficiency?
We need to increase if we’re going
THINK ACT SEPTEMBER 2011 59