12 September 2012

Should PSA & Mitsubishi Cosy Up?

PSA (Peuget/Citroen) are not doing well. Factories underutilised, share prices crashing and sales well down. Meanwhile Mitsubishi sales are also quite weak, with the brand surely possessing the worst range of cars of any car maker in the developed world. I mean you wouldn't buy a new Mitsubishi car, would you? I didn't think so. The SUVs/Pick Up they make are better, but still outclassed.

Recently Peugeot took rebadged Outlanders and is now taking ASXs. Which got me wondering as to why they have gone no further than that. Surely Peugeot makes some cars that Mitsubishi could sell. Peugeot is not in North America, but they could be via Mitsubishi sporting a three diamond logo.

The Plan: Mitsubishi sales are in free fall in Europe so pull out of Europe and let PSA sell what models they want from the Japanese car maker. Mitsi could spice up its car range with some 'different' cars. They could either work together as 'friends' or they could buy shares in each other and really cosy up together.

The benefits: Both makers would have a wider range of cars without expensive development costs. Factories would be more fully used, saving jobs and improving profitability.

The problems: Mitsubishi has been involved with Chrysler and Mercedes before, neither of which went that well so they could be gun shy. Peugeot cars are stylish, but not that well made.

In summary: Mitsubishi is too small to totally go it alone, the quality of its cars reflect budget restraints. PSA is too reliant on Europe and in desperate need of downsizing. There are benefits of closer co-operation but as to whether they ever will is debatable.

2 comments:

  1. There could very well be something brewing, yes. After all, the rebranding of Outlander and ASX did not come by coincidence...

    The short-term problem for both is overcapacity. Quick solution is to shut down factories; in the medium term they would look to seriously improve their offerings.

    The approach you propose would seem logical, but would not benefit Mitsubishi. They would loose European sales completely and be offered some interesting but poorly engineered cars instead.

    They should do a proper merger - or at least something 'a la' Renault/Nissan - to have a chance of fusing the Mitsu engineering with the French flair. (Not the other way around...) Simply rebadging eachothers cars would hurt both in the long run, but especially Mitsubishi.

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  2. Your pseudonym does you no credit, as your comment is very insightful.
    The mention of Europe is because I'd be very surprised if Mitsi isn't losing money selling cars there. They are pulling back on sales to try to arrest that situation. By selling to PSA, they could at least make money on each sale, albeit with modest margins. The flair and engineering mix could work well.
    Thank you for your comment.

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