The Tavares formula, if there is one, includes a focus on improving pricing even at the cost of volume; keeping a tight model lineup with strong branding; and efficient allocation of capital, analysts said. But there are other factors such as: Tavares' qualities as a leader; a willingness to explore lesser-known revenue streams such as used cars; and an agile production network.
Some of the success can also be attributed to luck or good timing, analysts said. Tavares arrived at a troubled PSA in early 2014 after stepping down as No. 2 at Renault under then-CEO Carlos Ghosn. The departure came after Tavares publicly expressed his wish to lead an automaker. With PSA bleeding cash after the 2008 recession, earlier management made some hard decisions. PSA was restructured to give the French government and China's Dongfeng Motors a 14 percent stake each. The move injected more than €1.6 billion into PSA while reducing the Peugeot family's stake to 14 percent from 25 percent. Assets were written down, lowering PSA's cost basis.
A factory at Aulnay, near Paris, had just been closed, as part of a plan to trim more than 10,000 jobs in France by 2015. A development deal with GM, signed in 2012, had yet to bear fruit, but it later resulted in key SUV models that hit the European market in 2016-17, and laid a trust base for PSA's acquisition of Opel/Vauxhall from GM in 2017. European consumers were poised for a four-year car-buying binge that erased the losses from the 2008 recession and 2012 "double dip."
Even though Tavares was able to hit the ground running at PSA, analysts praised him for his leadership qualities, operational efficiency, and discipline in reducing complexity and focusing on improving pricing.
"There is a long list of executional decisions that have been strong," Morgan Stanley analyst Harald Hendrikse said. "Having not had as much capital available as, say VW, PSA has been forced to make some more intelligent choices."