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PSA: the Difficulties of a ‘Volume and Diversity’ Profit Strategy

In: The Second Automobile Revolution

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  • Michel Freyssenet

Abstract

With its 1976 takeover of Citroën, followed in 1979 by Chrysler’s European subsidiaries, PSA was trying to quickly acquire the means to implement a new approach for it — a Sloanian ‘volume and diversity’ strategy. The constitution of a multi-brand group would have given the company a chance to design shared platforms for its Peugeot, Citroën and Talbot models (the latter being the new name given to Chrysler Europe) while hoping for economies of scale and a broad market coverage far superior to the one enjoyed by its direct competitors, Renault, Fiat and Volkswagen. Changing a profit strategy is, however, easier said than done, especially when the newly absorbed carmakers had previously followed quite different profit strategies. Sharply lower automobile demand and higher manufacturing costs following the monetary and oil crises of the time also made this a particularly risky operation.

Suggested Citation

  • Michel Freyssenet, 2009. "PSA: the Difficulties of a ‘Volume and Diversity’ Profit Strategy," Palgrave Macmillan Books, in: Michel Freyssenet (ed.), The Second Automobile Revolution, chapter 13, pages 246-266, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-23691-2_13
    DOI: 10.1057/9780230236912_13
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