Dont get pricked, get a new improved Cactus, with lower running costs and airbump technology.

• New Citroën C4 Cactus launches in the UK
• Priced from just £12,990 to £18,190 (MRRP OTR)
• Unique Airbump^® technology provides style with substance to absorb minor impacts
• 200kg lighter than an equivalent Citroën C4
• Up to 91mpg fuel economy & low CO₂ emissions from 82g/km
• Running costs 20% lower than conventional C segment hatchbacks
• Intuitive & innovative technology includes a fully digital Touch Drive interface, roof-mounted airbag & ‘Magic Wash’ windscreen wipers

The New Citroën C4 Cactus is a bold response to the changing needs and priorities of today’s car owners, offering a real alternative to the traditional compact hatchback, with a fresh and distinctive approach.

Visually striking, the New C4 Cactus stands out in the competitive C segment with its concept car looks, crossover styling cues and a broad range of customisation options.

Simplicity and efficiency combine with practicality and low ownership costs in a unique blend of form and function to offer more of what really counts to new car buyers.

The Citroën C4 Cactus heralds a new approach to automotive design, providing;

• More design
• Greater comfort
• More useful technology
• …with a reduced cost of ownership.

New Citroën C4 Cactus highlights include;

• Revolutionary Airbump^® technology, a stand-out design feature that absorbs minor impacts
• A fully digital, intuitive interface with controls grouped around a 7-inch touchscreen
• Wide sofa-style front seats
• ‘Magic Wash’ windscreen wipers that reduce washer fluid consumption and reservoir size by 50%
• The world’s first roof-mounted passenger airbag, allowing for more in-dash storage
• A panoramic glazed roof with advanced heat protection
• Impressive efficiency, with up to 91mpg fuel economy and CO₂ emissions from 82g/km
• Running costs reduced by around 20% compared to a typical C segment hatchback

The New C4 Cactus is available with three high specification trim levels – Touch, Feel & Flair – with prices starting from £12,990 for the petrol PureTech 75 manual Touch, rising to £18,190 for the ETG6 equipped e-HDi 92 Flair.

BUYER PROFILE

The New Citroën C4 Cactus sits at a market sector crossroads, offering a stylish alternative to a conventional C segment hatchback; more space than a B segment crossover; and a downsizing opportunity from larger C segment crossovers. Combining the best of crossover and hatchback, the New C4 Cactus pioneers the concept of the ‘Crosshatch’.

Typical C segment hatchback buyers look for attractive styling, reliability, functionality and value-for-money. A variety of needs must be satisfied, rather than one dominating factor. In contrast, B and C segment crossover customers place greater emphasis on distinctive styling, a sense of fun, personality and innovation.

The New Citroën C4 Cactus will exceed expectations for all of these consumer groups. It is designed to appeal to the heart, with its unique personalised styling, expressive design and pleasurable driving characteristics. It will also make sense as the smart choice, thanks to the lower cost of ownership, useable technologies, space and practicality.

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MORE DESIGN

The New Citroën C4 Cactus’ refreshingly modern exterior incorporates elements of crossover styling – such as a semi-raised ride height, wheel arch protection, short overhangs and roof bars – within a compact and eye-catching design.

Externally, the New Citroën C4 Cactus features pure, smooth surfaces with flowing lines. An ideal profile in terms of styling – with 1/3 glazed areas and 2/3 body panels – stand-out features include the floating roof, floating rear quarter-panels and Citroën’s unique Airbump^® technology.

At the front, the car features a high-tech light signature with LED daytime running lights and headlights seamlessly integrated into the bumper.

Offering exterior personalisation, the New C4 Cactus is available in 10 body colours, from eye-catching Hello Yellow to elegant Pearl White. All versions are fitted with black Airbump^® as standard with three additional colours – Stone Grey, Dune & Chocolate – also available depending on the body colour.

The standard specification black door mirrors and rear quarter-panel inserts can be changed to a choice of red or white. The roof bars can also be personalised, with an optional gloss white finish or standard gloss black. A range of stylish wheels come in 15 to 17-inch diameters, including four alloy designs.

Inside, there are five choices of seat upholstery – including velour, cloth and leather options – complemented by three interior ambiences (door trims and dashboard) – Stone Grey, Purple Highlight and Habana Highlight.

The interior is de-cluttered and minimalist, with clean lines and design nods to the theme of travel. The door handles are inspired by leather luggage straps and the lid of the Top-Box dashboard storage compartment has its own luggage-inspired design.

The uniquely shaped large panoramic sunroof features a state-of-the-art coating, equivalent to category-4 sunglasses, to filter UV light and reflect heat. Eliminating the need for an additional sunblind, the design maintains headroom, fills the cabin with diffused light and saves weight (6kg) compared to an equivalent car with a powered sunshade.  

AIRBUMP^®: A CITROËN EXCLUSIVE

Unique to the New C4 Cactus and an instantly recognisable feature of the model, Citroën’s new Airbump^®technology neatly sums up the fundamental purpose of design, providing an innovative solution to everyday problems, in a stylish and practical way.

Fitted to the front and rear doors, the tough air-filled TPU (thermoplastic polyurethane) capsules protect against minor bumps and scrapes. Airbump^® panels require no specific maintenance and reduce the stress and expense associated with car park dings and dents – cutting service and repair costs over the lifetime of the car.

GREATER COMFORT

The proportions of the New Citroën C4 Cactus are optimised for style, space and driving comfort with the de-cluttered cabin creating even more room for occupants.

Despite compact external dimensions – 4.16m long, 1.73m wide & 1.48m high – the 2.6m wheelbase and 1.48m height are virtually the same as the Citroën C4. This means plenty of leg, elbow and headroom inside for up to five adults.

The simplified dashboard creates more space for the front passenger and there are wide front seats that capture the style of a sofa. On ETG (Efficient Tronic Gearbox) versions, the gear selector is replaced by the neat ‘Easy Push’ system with ‘Drive, Neutral and Reverse’ push-button control, which makes room for a bench-style front seat layout.

Located on the passenger side of the dashboard, Top-Box is a large and easily accessible storage compartment made possible by new and exclusive ‘Airbag in Roof’ technology. This innovation delivers a roof-mounted front passenger airbag for the first time. The large airbag deploys from the roof and inflates correctly regardless of the passenger’s position. The 120-litre volume also ensures it covers the touchscreen area.

The doors feature large storage bins – big enough for two 1.5-litre bottles – as well as smaller storage trays. The boot is a generous 358-litre capacity, expandable to 1,170-litres with the rear seats folded.

MORE USEFUL TECHNOLOGY

The New Citroën C4 Cactus’ in-car technology focuses on connectivity, efficiency and usability without adding complexity – meeting real customer needs simply and intuitively.

Fitted as standard, the fully digital Touch Drive interface features a 7-inch touchscreen to control all the main vehicle functions, including;

• Automatic air conditioning
• Media (DAB radio, audio streaming, mobile connections, music and photo storage)
• Navigation (map view, speed limit display, traffic conditions, fuel-efficient routing)
• Driving Aids (reversing camera, Park Assist, speed limiter/cruise control)
• Telephone (hands-free via Bluetooth®, contacts, call management)
• Connected Services
• Vehicle Settings

All these controls are grouped on a single screen for practicality. For greater ease of use, there are convenient shortcut keys on either side of the main screen.

‘Magic Wash’ is an innovation that integrates targeted washer jets into the ends of the wiper blades, delivering the optimum amount of fluid directly in front of the blade itself. This new feature maintains visibility during operation, prevents overspray and reduces screen wash consumption – and therefore the size and weight of the reservoir – by 50%.

For a more relaxed drive, a range of innovative aids are also available, including;

• Park Assist, for automatic assistance when manoeuvring into a tight parallel parking space
• A reversing camera, which displays the rear view and guide lines on the touchscreen
• Hill Start Assist, to keep the car stationary when the brake pedal is released
• Static cornering lights, to provide an additional beam of light to the inside of bends, improving visibility and safety at corners and junctions
• Programmable speed limiter/cruise control, with up to six personalised speed settings
• Citroën eTouch, the brand’s localised emergency and assistance call system   

REDUCED COST OF OWNERSHIP

The New Citroën C4 Cactus shares the same platform as DS 3 (Platform1) and makes extensive use of the latest weight-saving materials, manufacturing processes and efficient design codes. The bonnet is aluminium, there are pop-out rear windows and a single-piece folding rear bench. Weighing from just 965kg, the model is 200kg lighter than an equivalent Citroën C4.

As a result, Citroën has been able to adopt smaller engines to improve efficiency, without compromising driveability. Combined with ultra-low rolling resistance tyres, the latest-generation PureTech petrol and BlueHDi diesel engines offer a responsive drive whilst delivering impressive combined fuel economy figures of up to 91.1mpg and CO₂ emissions from just 82g/km.

The New Citroën C4 Cactus is offered with six efficient powertrains, four petrol – PureTech 75, PureTech 82, PureTech 82 S&S & PureTech 110 S&S – and two HDi diesels – e-HDi 92 & BlueHDi 100.

Engines are mated to either 5-speed manual or 5 or 6-speed ETG (Efficient Tronic Gearbox) transmissions.

All diesel models are sub-100g/km of CO₂ and are eligible for free VED. There is even a VED-exempt petrol version – the PureTech 82 S&S ETG – which emits just 98g/km.

The weight-saving measures also reduce wear on other consumables, including tyres and brake pads.

Overall, the ‘design to value’ approach employed with C4 Cactus reduces running costs by around 20% compared with conventional models in the compact hatchback segment.

With its compact, efficient powertrains and well matched running gear, the Citroën C4 Cactus combines performance, comfort and driveability in a light-weight, easy-to-drive car.

PSA sees growth in Q1, now with added model sales figures

In the First Quarter of 2014, PSA Peugeot Citroën saw a rise in worldwide unit sales of 7.7%, supported by the recovery of the European market and by the strong growth in China. The Group was, however, impacted by a sharp deterioration in foreign exchange rates.  

The Group pursued its turnaround plans with:

• The unveiling of the "Back in the race" plan by Carlos Tavares, Chairman of the Managing Board, setting out the operational framework for a turnaround;
• The success of new launches, with the Peugeot 308, crowned "Car of the Year", the Citroën C4 Picasso, as well as the announcement of the launches of the Peugeot 108, the Citroën C1 and C4 Cactus, and the Peugeot 408 in Second Half and the DS 5LS in the Second Quarter in China;
• A strong rise in volumes in China, while the Russian and Latin American markets remain tough for the Group ;
• Progess in the restructuring plan, leading to improved competitiveness in Europe and the reduction of fixed costs ;
• The successful renewal of the revolving credit facility, significantly oversubscribed and extended to €3bn¹.

First Quarter 2014 revenues

• Group consolidated revenues of €13.3 bn, up 1,9% compared with the previous year;
• Automotive Division revenues of  €8.9bn excluding China JVs revenues, up 2.0% vs Q1 2013, significantly impacted by exchange rates ;
• Faurecia revenues of €4.5bn, up 3.4% ; Banque PSA Finance revenues down 7.4%.

Outlook

In 2014, PSA Peugeot Citroën expects to see automotive demand increase by around 3% in Europe² , by approximately 10% in China, and a decline around 7% in Latin America and around 5% in Russia.

The Group positive Group operational free cash flow³ by 2016 at the latest, and €2 bn cumulated Group operational free cash flow over 2016-2018. It is also targeting to reach a 2% operating margin⁴ in 2018 for the Automotive Division, targeting 5% within the timing of the next mid -term plan 2019-2023.

Automotive Division

Automotive Division revenues rose by 2.0% in the first quarter of 2014 to €8,925 million from €8,747 million in the year-earlier period. Worldwide sales of assembled vehicles rose by 7.7% over the period, to 726,000 units. This reflected a strong rise in volumes in both Europe (+16.0%) and China (+18.3%), versus declines in Latin America (-14.5%) and Russia (-7.9%).

Revenues from new vehicle sales amounted to €6,240 million compared with €6,070 million in first-quarter 2013, up 2.8%, driven by a 4.8% rise in unit sales ex-China, a positive 1.7% product mix effect thanks to recent model launches, and a positive 1.3% price effect, reflecting the consistency of the Group's pricing policy in a market where pricing remains stable at a high level, and a slightly positive market mix of 0.2%.

These favourable elements partially offset the strong negative currency effect of 4.5%.

New vehicle inventory stood at 422,000 units at 31 March 2014, up 8,000 units compared with a year earlier, reflecting the growth in volumes. The Group continues to tightly manage inventory, in line with its objectives of operating free cash flow burn reduction.

Product highlights

At end-March, orders for the Peugeot 308 totalled 70,000 units since launch, ahead of target, driven by the “Car of the Year” award in March 2014, the launch of the 308 SW version and the Pure Tech petrol and Blue HDi diesel engines, both of which offer best-in-class carbon emissions performance. To support the strong demand, an additional shift was introduced at the Sochaux plant.

The Peugeot 2008 is going from strength to strength, with 40,000 units sold over the quarter. The Group initiated a second project to increase production capacity at the Mulhouse plant.

The C4 Picasso and Citroën Grand C4 Picasso delivered another strong performance with 60,000 orders for the 5-seat version at the end of March and 35,000 orders for the seven-seater. High level versions accounted for 70% of sales. The Citroën C3 also returned to its very good sales performance. In addition, the quarter saw the reveal of the C4 Cactus, which illustrates Citroën's new positioning.

The partnership with Changan for the DS brand in China is developing, with new models planned in 2014, notably the DS 5LS in March, and a new DS 6WR SUV, announced at the Beijing Auto Show.

Faurecia

Faurecia reported revenues of €4,518 million for the first quarter of 2014, an increase of 3.4%, and 7% on a comparable basis⁵. The Quarter saw strong growth in Europe, Asia and Latin America, and revenues increased at all divisions.

Banque PSA Finance

Banque PSA Finance's revenues declined by 7.4% to €418 million in the First Quarter 2014, notably due to the effect of a lower loan book.

Group Highlights

• On 26 March 2014, the final agreements were signed between PSA Peugeot Citroën, Dongfeng Motor Group, the French State and Etablissement Peugeot Frères and FFP. They provide for the strengthening and deepening the existing manufacturing and sales partnership with Dongfeng Motor Group and manufacturing synergies estimated at around €400 million a year for PSA Peugeot Citroën by 2020, a €3-billion capital increase and free attribution of equity warrants to existing shareholders. They also provide for a balanced ownership structure with DFG, the French State and Etablissements Peugeot Fères / FFP each holding a 14% stake in Peugeot SA.

• At today's Annual General Meeting of 25^th April 2014, shareholders will be asked to vote on resolutions concerning, among other things, the capital increases, the free attribution of warrants to current Peugeot SA shareholders and the change in the Supervisory Board structure. 

• In the first quarter, PSA Peugeot Citroën also announced that it has entered in exclusive negotiations with the Santander Group to form a European partnership. The project would accelerate the end of the use of the French guarantee; improve Banque PSA Finance's cost of financing and competitiveness; a strengthened commercial tool for the Peugeot and Citroën brands; and potential cash upstream up to €1,5 billion by 2018 for the Group. 

• During the first quarter, the Group continued to deploy its plan to restructure manufacturing and sales operations in France; 7,730 files for mobility agreements were signed at March 31, 2014.

In April 2014, the Group signed new €3-billion syndicated credit facility comprising a €2.0-billion tranche expiring in five years and a €1.0-billion tranche expiring in three years with two optional one year extensions. The line of credit is contingent on the completion of the share and rights issues announced last 19 February.

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¹Contingent on the completion of the capital increases  announced last 19 February
²Vs a market estimated by the Group to be slightly positive at around 2% in Europe and around 10% in China, with a 2% decline in Latin America, and a stable market in Russia on February 19,  2014
³Free cash flow of the Manufacturing and sales companies  without restructuring and exceptional
⁴ROI relating to revenues
⁵Same perimeter and exchange rates

PSA to halve lineup in push for 2% margins by 2018

PSA/Peugeot-Citroen outlined plans to cut its model lineup by almost half and to turn Citroen's DS unit into a separate brand in a bid to restore the automotive division’s profit.

By 2018 the carmaking unit’s operating margin will amount to 2 percent of sales, with the figure rising to 5 percent in the 2019-2023 period, CEO Carlos Tavares said today in his strategic review of the Paris-based automaker. 

Tavares, 55, became head of PSA at the end of March to guide a reorganization after cumulative net losses exceeded 7.5 billion euros ($10.4 billion) in the past two and a half years.

PSA said today that the strategy hinges on reducing the number of models to 26 vehicles from 45, as well as a push into markets outside Europe, funded in part by bringing in Chinese partner Dongfeng Motor Corp. and the French state as investors alongside the Peugeot founding family.

"The group will continue to reposition the three brands, while clarifying their lineups," PSA said in a statement. Scaling back the range of models will allow the company to "improve market coverage and improve margins by targeting the most profitable segments." 

The DS nameplate, revived five years ago as a higher-priced small-car range, will get its own separate management team amid an "aggressive" push into China. The brand will sell six vehicles by 2022.

PSA said it is reorganizing sales operations, and reiterating a target to triple Chinese deliveries in partnership with Dongfeng by 2020, along with restoring profit in Russian and Latin American businesses.

"What we're going to stop is a mindset where in order to cover fixed costs, we're going to sell cars at a loss," Tavares said today on a conference call with analysts. "The profit culture is something that we need to put ahead of everything else."

Spending on research and development will average 7 percent to 8 percent of revenue in the next three years, Tavares said today on a conference call. PSA is targeting 2 billion euros in operating free cash flow in 2016 through 2018, the company said.

'Minimum requirement'

Erich Hauser, a London-based automotive analyst at International Strategy & Investment Group, said: "It seems to be the minimum requirement, but it’s a start. When you run a big ship like this, you can’t expect to turn it around in a few years."

Dongfeng and France will each contribute about half the money for a 3 billion-euro capital increase planned by PSA in exchange for 14 percent stakes apiece, according to an agreement reached in February. The family’s ownership will drop to 14 percent from the current 25.5 percent, ending their control of the 118-year-old carmaker. 

Tavares joined PSA in January from French rival Renault, where he was chief operating officer, to succeed Philippe Varin as CEO. The business plan puts Tavares’s stamp on the carmaker’s revival after Varin, 61, arranged to bring in the outside investors and started developing upscale models for the Peugeot brand.

Varin introduced Citroen’s premium DS vehicles in 2009, taking the name from an iconic model produced from 1955 to 1975.

“What’s really interesting is that Tavares is clearly taking a leaf out of Renault’s Drive the Change plan,” International Strategy’s Hauser said. “It’s very similar: in the very near term, it’s about fixing cash and in the longer run, it’s about returning to profitability.”

PSA was among the carmakers hardest hit as industrywide European auto sales contracted over six years to a two-decade low, with the company’s market share narrowing to 10.9 percent in 2013 from 12.8 percent in 2007.

Job cuts

Varin set a target about four years ago for PSA to generate 50 percent of its deliveries outside Europe by 2015.

Varin responded by starting a cutback of 11,200 jobs in France, or 17 percent of its work force in the country, shutting a plant near Paris last year and bringing out new models, such as the 2008 small SUV, to revive demand.

The proportion of PSA’s non-European sales increased last year to 42 percent, with China accounting for 20 percent of the total, from 38 percent in 2012.

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How new PSA CEO Carlos Tavares plans to revolutionise the ailing company.

New PSA/Peugeot-Citroen CEO Carlos Tavares takes over an automaker that has lost more than 7 billion euros in the last five years because he says, "making money was not the core value here." That is one of the first things the 55-year-old former No. 2 at Renault plans to change. Other challenges include reducing PSA's bloated car lineups, strengthening the automaker's presence in China, adjusting the company's European production footprint and navigating the potential minefields that come with having to please powerful new shareholders.

Tavares welcomes the long list of tough tasks. "When you have the opportunity to contribute to a turnaround, I think that's exciting," he told Automotive News Europe.

On April 14, Tavares, PSA’s third CEO in five years, will unveil his Back in the Race recovery plan for Europe’s second-largest automaker after Volkswagen Group. The straight-talking Portuguese national shared his views on the problems PSA faces at the Geneva auto show last month. Based on his comments, as well as feedback from industry watchers, the automaker has a number of challenges ahead to end its massive cash burn and position itself for long-term success. Tavares’s key tasks include:

• Increasing operating profit: Tavares says to do this PSA will need to sell its cars “at the right price.” It also must reduce production costs and work efficiently with suppliers.

• Reduce working capital: Tavares says a key here is to streamline PSA’s inventory of unsold vehicles, which he finds much too high.

• Manage cash better: Tavares wants all investments to provide an adequate return. He believes PSA should abandon car segments where its models are unprofitable and that it needs to avoid oversaturating segments.

• Invest in DS: Tavares wants to transform the Citroen upscale subbrand into an internationally recognized stand-alone luxury marque that can compete with Germany’s premium brands.

• Focus on China: PSA needs to build even stronger ties with partner and part owner Dongfeng Motor.

• Reposition in emerging markets: PSA must reduce its product lineups in money-losing countries such as Russia and Brazil.

Sharper focus

Tavares says PSA will stop making unprofitable models and focus on vehicles that generate high volumes and strong margins, something he did successfully while he was chief operating officer at Renault from 2011 until last summer. “His accomplishments at Renault are remarkable and show what is possible,” Sascha Gommel, a Frankfurt-based analyst at Commerzbank, told Automotive News Europe.

One segment where PSA has potential to streamline is compact cars. With the recent addition of the Citroen C4 Cactus, PSA offers five compact hatchbacks for two brands (the others are the Citroen C4 and DS4 and Peugeot 308 and 3008). Only Volkswagen Group offers the same number of compact hatchbacks, but it spreads them over three brands (Audi A3, VW Golf, Golf Plus and Beetle and Seat Leon). There was a huge difference in demand as VW Group’s compact hatchbacks had combined sales of 816,000 in Europe last year compared with PSA’s 287,000, according to data from JATO Dynamics. Analysts say one reason for the big difference is that PSA models lack key features offered by VW Group models.

“The Peugeot 308 competes against the Golf, but it does not have four-wheel drive or an automatic transmission. Tavares clearly needs to change PSA’s product portfolio,” said Florent Couvreur, a Paris-based analyst at CM-CIC Securities.

Not so French

Couvreur sees two other problems that Tavares needs to address: PSA’s lack of scale and its excessive French-ness. “If it can’t share development costs with other partners, then PSA will continue to lose money,” she said. “For example, PSA’s agreement with Ford for diesel engines works well, now Tavares needs to seal other agreements like this.”

Couvreur also believes that PSA needs to focus more on making cars that appeal to customers outside its home market. “Today PSA makes cars for French people, with a focus on diesel engines, manual transmissions and hatchback bodies. Tavares must make sure that PSA puts cars in the pipeline that people will want to buy outside of France and around the world,” she said. That means more gasoline engines, more automatics and fewer hatchbacks.

PSA is set to announce that it will spend more on r&d and that it will develop technologies for a smaller range of cars that will appeal to a wider base of customers worldwide, with less emphasis on France. The money for future investments will come in part from a 3 billion euro capital increase, in which China’s Dongfeng and the French state will initially contribute about half the money in exchange for stakes of 14 percent apiece. Banco Santander also will contribute funds through a partnership with PSA’s lending arm.

In terms of brand positioning, Tavares says the 308 compact, the 2014 European Car of the Year, epitomizes what he sees as Peugeot’s strengths: a convergence of the rigor, seriousness and robustness typical of a German car with the emotion of a Latin brand. He also considers the C4 Cactus a benchmark for future Citroens because of its comfortable design, ease of use and intelligent innovations.

Better pricing in Europe

Analysts say that to get PSA to break even by 2016 or sooner Tavares must reduce PSA’s cash burn by increasing the efficiency of its European production network and closing the pricing gap with competitors. “If Tavares can close the price gap with Volkswagen by 10 percent … that alone could fix the bottom line,” said Paris-based Deutsche Bank analyst Gaetan Toulemonde.

Commerzbank’s Gommel said Tavares proved at Renault that he knows how to turn around a brand’s pricing. “He can improve pricing more easily than when he was at Renault because PSA has a stronger brand reputation than Renault has.”

PSA shut its plant in Aulnay, France, last year and is looking at ways to lower production costs further in its home region. One way is to add models to the underutilized plants, but Tavares also wants to maximize the efficiency of PSA’s European factories, French newspaper Le Figaro reported. Tavares said in February that margins for the Citroen C-Elysee and the Peugeot 301, which are made in Vigo, Spain, are marginal and did not reflect an efficient use of capacity. “Tavares must improve PSA’s European footprint. Capacity is clearly an issue and existing capacity needs to be better utilized,” Gommel said.

Streamline Russia, Brazil

Tavares is expected to announce that PSA will streamline its offerings in South America and Russia. It is losing money in both regions, analysts say. PSA has a production capacity of 100,000 units in Kaluga, Russia, but the plant only produced 20,000 vehicles in 2013, French newspaper Le Mondereported. The automaker also offers more than 25 different vehicles in Russia, which Deutsche Bank’s Toulemonde says is too many, especially in a market that has been in decline since last year. “Tavares needs to sell fewer than 10 models there,” he said.

Added Commerzbank’s Gommel: “In South America and in other emerging markets where it already has local production, PSA must do better. It needs to improve its localization at its plants in emerging markets, where it continues to import too many parts.” Doing this would better protect PSA from exchange rate fluctuations, the analysts said.

Meanwhile, CM-CIC’s Couvreur pointed out that Tavares was instrumental in making Renault successful in eastern Europe and South America by offering limited ranges that sold in high volumes. “I think that PSA can be profitable in Brazil and in Russia in two to three years by adopting a more localized strategy. These two countries currently are Tavares’ problem markets,” she said.

Tavares enters PSA as the automaker is starting to gain traction in China. His job will be to strengthen the automaker’s ties with Dongfeng while avoiding potential conflicts over technology sharing. “Tavares must clearly make the boundary between PSA’s and Dongfeng’s technologies,” CM-CIC’s Couvreur said. She thinks that PSA needs to protect its expertise but fears that this will be difficult. “Dongfeng’s two representatives on PSA’s supervisory board will try to accelerate this technology transfer,” she said. Couvreur also fears that one day Dongfeng will leave the alliance with enough knowledge and technology to compete against its former partner. She says this has happened in China to companies such as Alstom and Airbus. “This is going to be a very touchy subject for Tavares,” she said.

More to do in China

Commerzbank’s Gommel said PSA’s challenge today, however, is expanding its presence in China and to do that it is relying heavily on Dongfeng. “PSA has fixed a lot of its problems in China, but it has more do. Clearly, the partnership with Dongfeng will help, but China still needs to become a more important part of its business,” he said.

Established in 1969 and based in the central Chinese city of Wuhan, Dongfeng already operates three factories with PSA in the world’s largest auto market. The partners plan to raise joint production to 750,000 vehicles by the end of 2015 from a record 550,000 units sold last year. Dongfeng wants to sell a combined 1.5 million Dongfeng and PSA vehicles a year in China by 2020.

Despite the big challenges that Tavares faces, the consensus is that he has the right experience, the right tenacity and the right amount of supervisory board support to fix PSA. “The Peugeot family has blocked certain decisions in the past that would have been good for the company,” Commerzbank’s Gommel said. “Tavares has a more independent board now that will not put the family’s interests first.”

Toulemonde also is optimistic about the new CEO’s chances. “Tavares’ track record speaks for itself,” he said. “You just have to look at what he has done at Renault, what he has done at Nissan and the perception the market has of him.”

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Citroen C4 Cactus to start below 14,000 euros in France.

Citroen intends to price the C4 Cactus between compact cars and small crossovers, Julien Montarnal, the executive responsible for the brand's strategy, told Automotive News Europe.

When it goes on sale in June the C4 Cactus's base price in France will be 13,950 euros -- well below the 18,850 euro starting price of the C4 compact hatchback.

Citroen CEO Frederic Banzet said the car will be "10 to 15 percent less expensive than its compact competitors." But the average transaction price will be "in the region of 16,000 to 17,000 euros," increasing to 22,250 euros for the diesel version, Banzet told Automotive News Europe last week at the Geneva auto show.

Finance options

Citroen is also set to release more information on its planned finance options for the C4 Cactus. An all-inclusive monthly flat rate scheme and a novel "pay-per-use" contract will be provided through the brand's house lender, Banque PSA Finance.

Montarnal said Citroen would offer the base version of the C4 Cactus, the Start, (which does not have air conditioning), for a monthly flat rate of 199 euros in France. "The contract is for 36 months and includes up to 45,000 kilometers, the loan of the car, service and a no-fault insurance," he said.

Customers, however, will also be able to specify different levels of vehicle trim and service, with the monthly flat-rate payment reflecting these choices. At the end of the period customers will have the option to either buy the car outright, hand it back to the lessor or start a new lease on a new vehicle. All-inclusive flat rate contracts will be offered throughout Europe.

The pay-per-use contract will require C4 Cactus customers to pay a fixed monthly rate that will be lower than the all-inclusive flat rate. But in addition they will incur a monthly fee directly related to distance driven, with nothing owed if the car is not driven during the period.

Pay-per-use contracts will be offered initially in Spain, Italy and the UK. Availability in other European countries would depend on such factors as the demand in each market, local legislation and reaching agreements with local insurers, Montarnal said.

"There is a portion of the population that is not willing to buy a car, but willing to buy the use of a car," Banzet told Automotive News Europe.

Solutions such as car-sharing schemes and short-term rentals both had drawbacks in terms of vehicle availability and convenience. "We are proposing a way to only pay for the use of the car, while still having it at your disposal whenever you want it," Banzet said.

It would be of particular appeal, he added, "for either low-mileage drivers or irregular users of the car, for instance for those who don't use the car for some months in the year."

One the underlying aims of both financing approaches is the avoidance of unpleasant financial surprises at the end of the contract period.

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