PARIS -- PSA/Peugeot-Citroen's three-year plan to obtain better parts from suppliers is succeeding, a top executive says.
"We have improved the quality of components by nearly 45 percent," said Jean-Philippe Collin, PSA's purchasing director. "We are on target."
A few months after joining PSA in July 2004, Collin launched a drive to boost parts quality. His move followed criticisms that poor parts were damaging the quality of PSA's cars.
Collin's aim is to lower the overall rate of faulty parts per million - a common measure of quality for the industry - to 50 parts per million by the end of 2007.
At the plan's launch last year, PSA said it would reduce faulty parts by 25 percent every six months. This suggests that its parts-per-million rate at the end of 2004, when the project began, was about 276. PSA declined to confirm that figure.
PSA implemented a range of 30 measures to improve the performance of its 700 auto parts suppliers.
Among the changes:
- Using liaison teams in each assembly plant to tackle quality issues, especially during a new model's ramp-up.
- Holding quarterly top-level meetings between Collin and executives from PSA's 30 largest suppliers to discuss ways to improve quality.
- Introducing quality awards for the best-performing suppliers.
PSA spends 22 billion euros a year - $26.65 billion at current exchange rates - on car components and another 7 billion euros, or $8.48 billion, on such things as capital goods and office equipment. These purchases equal about half of PSA's revenues. PSA sales in 2004 were 56.1 billion euros, or $76.54 billion.
Collin said automakers need to check carefully the quality of parts that suppliers buy to make components. This is because suppliers
increasingly manufacture parts previously made in-house by automakers.
Supplier content accounts for about 65 percent of the manufacturing cost of a car, Hermann Scholl, Robert Bosch GmbH's supervisory board chairman, told Automotive News Europe.
Last June, PSA's brands did badly in France's first industrywide survey of customer satisfaction by J.D. Power and Associates. Peugeot was 10th and Citroen was 14th in the survey's overall satisfaction rankings of 25 brands.
PSA's French rival Renault says its quality improvement plan, which was launched two years ago, is paying off.
Yann Vincent, the carmaker's quality director, said Renault's new models have fewer problems in their first three months than in 2002.
Vincent said company statistics showed 105 problems per 1,000 cars, compared with about 300 in 2002.
Much of the improvement is a result of Renault successfully fixing electronic bugs in its models.