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STOCK MARKET VIEW
Peugeot-Citroën recovery thought to be jeopardised by “DS” project


Published: Tue, 08th Dec 2015 10:45:08 GMT
 

Citroen DS5 undercover 2015

“The company is pumping billions into this project - We believe this is misguided” - Report Tata may produce some cars for Peugeot

Peugeot-Citroën has made impressive progress moving out of the red and into profit but Bernstein Research wants it to dump its “DS” premium project which it says is doomed to fail.

“One of the key tenets of PSA’s long-term strategy is to develop “DS” as a third brand and as a “premium” offer. 

The company is pumping billions into this project. We believe this is misguided,” said Bernstein Research analyst Max Warburton.

Fitch Ratings recently applauded Peugeot-Citroën for breaking even in 2014 after losing heavily in 2013, and predicted a three per cent profit margin this year.

Warburton said “DS” will jeopardise this progress.

“PSA already has two brands. It doesn’t need and can’t afford a third. DS is ill-defined, has low consumer recognition and is highly unlikely to generate shareholder returns,” Warburton said
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