PSA/Peugeot-Citroen will revamp its manufacturing process to boost productivity, where it badly trails nearly all its European competitors.
Chairman Jean-Martin Folz pledged that PSA will save at least E1 billion annually by 2006 through improved manufacturing techniques and full implementation of the French automaker's five-year-old platform sharing program. He said the savings will help improve PSA operating margins, estimated at 4.5 percent to 5 percent last year. Folz set 6 percent as a mid-term goal.
"We're well aware we have room for improvement," said Folz at the Aulnay assembly plant near Paris.
Folz did not specify the internal productivity benchmark he is measuring against. But independent productivity surveys rank PSA consistently behind nearly all European mass-market competitors.
On a plant productivity index devised by World Markets Research Centre, a London-based consulting firm, PSA built 48 cars per assembly worker in 2001 compared with 58.3 for all European mass-market automakers. Only Volvo did worse, with 43 cars per worker, said James Durance, auto industry research manager.
In contrast, Nissan and Toyota ranked tops in productivity with 95 and 87 cars per worker, respectively. PSA rival Renault scored an above-average 63. The WMRC annual survey does not include niche or luxury automakers.