PSA Peugeot-Citroën has unveiled its new "Push to Pass" six-year strategy in which it has revealed that it will focus on meeting all of its customers' mobility needs. In a statement and a presentation this morning (5 April), PSA said that "driven by evolving customer expectations, the plan will transform the company in order to unleash its full potential, capitalising also on the efficiency, operational excellence and agility demonstrated during the 'Back in the Race' plan."

The plan will focus on two pillars: one of which is PSA as "a great car-maker" and another that develops the automaker as a "mobility provider." In the former, PSA intends to build on the progress that it has already made in this area for its three brands, Peugeot, Citroën and DS Automobiles. This will include a "product blitz" that will launch 26 new passenger cars and eight new light commercial vehicles (LCVs) by 2021, including a new one-tonne pick-up. Ultimately, this will lead to the launch of "one new car, per region, per brand, per year" and an average vehicle age in its fleet of 3.5 years by 2018. There will also be a significant focus on new technology in this with the launch of seven gasoline (petrol) plug-in hybrid electric vehicles (PHEVs) and four battery electric vehicles (BEVs) by 2021, which will be underpinned by two "multi-energy modular platforms." Other technology initiatives will include a focus on connected cars, with a plan for "infotainment over the air" from 2018 and "full car over the air" from 2020. Autonomous driving technology will also play a significant part in its future, with the roll out of this technology for use in traffic from 2018, before rolling up to "hands-off" in 2020 and "eyes-off" in 2021. Overall, there will also be a greater focus on quality, with a programme called "New at 3 years" that is intended to not only improve residual costs but also to halve PSA's warranty costs.

On a brand basis, PSA has said that Peugeot will continue on the path towards being the best high-end generalist brand. In order to do this it will release more top variants, particularly in GT and GTI trim levels, and greater connectivity and services. The company will also continue to avoid "toxic channels" – likely to mean sales to rental fleets and others that are intended to improve unit sales numbers – and this strategy will help residuals. At Citroën, the "people-minded" brand will focus on comfort as it launches 12 new global models by 2021, of which seven will arrive by 2018. In addition, it is expecting a 30% increase in volume by 2021. As part of its plan to meet customer needs, it will further focus on no-haggle pricing and interactivity, which it hopes will lead it to become one of the three most recommended passenger car brands by 2021 up from eighth in 2015. The premium DS brand will have a great deal of further development, with five new models to be launched by 2021. In order to meet customer expectations at this level, it will introduce "DS Always By My Side," a concierge service. It also intends to improve loyalty among customers. All three brands will also aim to improve pricing power and transactional costs.

On a regional basis, Europe looks set to remain a leading market for the brand. With this in mind, there will be 28 new launches there during the next six years, as well as enhancing its light commercial vehicle (LCV) leadership. Targets it has set for this market include being at the top in profit margins, and a 20% improvement in manufacturing efficiency between 2015 and 2018.

Strategies for other markets

• In China and South East Asia region, PSA intends to reach 1 million sales in China by 2018, as well as launch 20 new models by the end of its plan including three PHEVs and two BEVs. It is also looking for a 10% operating margin from both its joint ventures (JVs) – Dongfeng Peugeot-Citroën Automobile (DPCA) and Changan PSA (CAPSA). PSA also revealed that it plans to build a plant in the Association of Southeast Asian Nations (ASEAN).
• In Latin America, where all OEMs have come under pressure from the retreat in Brazil and Argentina during the past few years, PSA plans to double volumes in Mercosur by 2021 with 16 launches that are intended to help triple profits by this point. However, the company also intends to double its volumes outside the South American trading bloc. There are also plans to increase local component sourcing to 85% to reduce the impact of currency translation.
• Cutting the impact of currency exchange will also be a focal point of its Eurasia regional strategy, heavily focusing on Russia. Although PSA has said it is still on course for profitability during 2017 there, it is planning to increase localisation of component supplies to 75% while local vehicle production will be increased to 60% by 2021. It also anticipates a four-fold increase in sales and high double-digit percentage profit margin. It will also launch 17 new models.
• In Middle East Africa, where it is already making headway, PSA has said it plans to resume production with its partner Iran Khodro during 2017, which will be joined by projects in Morocco and Algeria. It is planning 23 product launches in this region, taking sales to 700,000 units by 2021, which will be supported by 70% localisation of component supply. It is also anticipating a four-fold increase in profits by 2021 compared to 2015.
• For its India-Pacific market, it unveiled plans to enter a partnership in 2018 to return to the Indian market by the end of 2021. It intends to launch 17 product launches in the wider region by 2021, as well as achieving a 50% increase in sales between 2015 and 2018.

After recent speculation, PSA has also revealed that it has a 10-year plan of returning to the North American market. However, while it already has a team in place, it intends for this to be a "thoughtful" and "step-by step" approach, trying to understand the market before starting sales there. According to the company, it will begin by offering car-sharing mobility services from 2017 to begin making inroads and gain data, with Bolloré Group having been mentioned as a possible partner in this area. Without giving any timeframes, PSA expects to follow this with a development of this car-sharing initiative that will use its own products when they are legalised for the region, and find out how these meet expectations. This will eventually be followed by sales of cars in the local market, with local sourcing planned to take place when appropriate.

As for the other pillar of PSA's plan in which it sees itself as a "mobility provider," the company is seeking to embrace the 15 million customers that it says it has across a wider business, turning this from a transactional to a personal relationship. An area it believes can be developed is the offering of "hassle-free mobility" by becoming a multi-brand leaser of vehicles, offering increased servicing contracts and insurance. It also intends to develop its presence in the aftermarket, where as well as through its existing OEM network, it intends to expand a cost-effective option through the expansion of the Euro Repar car servicing business, while also planning to expand the Mister Auto online parts business in to 20 countries by 2021 from six at present. It has also announced that it will widen its involvement in the used car business with online trading beginning at the end of 2016, while offering business to business (B2B); business to customer (B2C); and customer to customer (C2C) opportunities in 2017. Overall it is expecting 800,000 sales per annum by 2021.

There are also plans to heavily develop its involvement in connected car and mobility services during the course of the plan. In the B2C field it already noted its involvement in car sharing with Bolloré, Multicity and Koolicar. Indeed, on the same day as this announcement it revealed that it has taken part in a EUR18-million capital increase in Koolicar, a peer-to-peer car sharing business, with investment fund MAIF Avenir. This is to support the installation of 30,000 cars with its technology as well as the expansion of its internal capabilities. However, PSA also intends to expand its B2B car-sharing and fleet management capabilities from 20,000 to 100,000 units. It is also looking at opportunities to sell the data that it has generated from its connected car services. Overall, it believes that revenues from this will be EUR300 million by 2021.

PSA also has plans to set up a venture capital business with EUR100 million of seed funding through which it can invest in new areas of mobility at an early stage and remain on the offensive.

With these initiatives, the company is expecting to improve its financial results. Supported by "frugal" research and development (R&D) expenditure and "rigorous control" of its production and fixed costs, the company intends to reach an achieve an average recurring operating market between 2016 and 2018 of 4%, rising to 6% by 2021. Furthermore, it plans to deliver group revenue of 10% by 2018 compared to 2015 under constant exchange rates, as well as targeting additional revenues of 15% by 2021, also under constant exchange rates.

Symbolising the development of the automaker, it announced the same day that it will rename itself "Groupe PSA". It has said that the new name is "aligned with the shift in its business model towards a broader portfolio of business activities in a drive to optimise its existing customer base while expanding that base through digital innovation." The automaker also revealed that it would use a new logo that has been designed in-house at the Peugeot Design Lab.

Outlook and implications

PSA's latest mid-term plan has been announced just two years after its original "Back in the Race" strategy was revealed in April 2014 as it managed to smash some of its key financial goals during 2015 . Although the original plan was designed to support the OEM's revival, this latest initiative is all about making headway in the business, building on many of the initial goals now that it has greater visibility. This includes the development of its brands and markets, although it is also now looking at taking risks that will require greater capital outlay such as its move into India and a return to the North American market. However, at the same time it appears to be being very astute in the way it enters new markets by sharing with partners and seeking to grow its presence without leaping too far too soon. Nevertheless, neither will be easy to gain a substantial presence in. IHS Automotive will consider the impact of PSA's plan and reflect it in its forthcoming forecasts.

However, as with many automakers PSA is seeking to capture customers outside its traditional businesses. Indeed, the fear of disruption and the sharing economy has led automakers to embrace new ideas such as car-sharing initiatives, particularly given the impact that this may have on car ownership levels in future, particularly in big cities. PSA's plan seems to put great emphasis on a "cradle to grave" vehicle ownership and all facets of this including embracing owners of pre-owned models and their requirements, while offering well received services could also help maintain customers. Even so, it remains to be seen whether this will pan out as expected, particularly given the shifts that continue to take place.