Peugeot chief promises 100 days of action to restore car maker's fortunes

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In his first hours in the post, Christian Streiff, the chairman of the PSA Peugeot Citroën managing board, promised yesterday to address the group's deteriorating financial performance.

Europe's second-biggest car maker announced net profits in 2006 down to €176m (£116m), from €1.03bn in the previous year. Costs associated with the closure of its plant in Ryton, Coventry, and a restructuring of the Faurecia parts division accounted for part of that, but the principal concern is the group's sagging sales and declining margins.

Mr Streiff said the "key" to the company's problems - "80 per cent or 90 per cent of the difficulties" - stemmed from loss of market share in its western European base, especially in France.

In absolute terms, western European sales declined by 2.7 per cent to 2.3 million units in 2006, offset slightly by burgeoning growth in China, although the group has seen its market share there roughly halve in a decade.

Mr Streiff blamed the quality of the firm's products and customer service. It is "not where we have to be" and it was his "first priority" to improve matters. He also bemoaned the "missing spark of genius" in its cars.

While he lauded the achievements of his predecessor, Jean-Martin Folz, after a decade in the job, the praise was focused on the period before 2002, when the Peugeot 206, Citroen Xsara Picasso people carrier and Peugeot 307 transformed the group's prospects.

More recently, Peugeot Citroën has completely missed out on the boom in SUVs, for example, while a green hybrid powered model is still not in showrooms (Mr Streiff promises a diesel hybrid will be available "as quickly as possible").

Teams comprising 100 managers have been given 100 days to prepare proposals to improve the company's performance. A reorganised board of directors is already in place.

Further cost-cutting is clearly on the agenda, with the possibility of still further reductions in the headcount, and Mr Streiff has "ruled nothing out" when it comes to more plant closures, though other measures would be considered first.

He said he "wants to make productivity gains an obsession in the company", and is keen on "deepening" the collaborative ventures with Ford (on engines) and Toyota (on joint production, where he says Peugeot had "learnt a lot"), but not adding new ones.

He is also ambitious to grow in China, South America and eastern Europe.