French car industry and globalization. The case of PSA Peugeot Citroën and Renault

Abstract

With two companies, PSA Peugeot Citröen and Renault, the French car industry seems to have understood the globalization. For a long time, she adapted itself to the changes of the economy. Nevertheless, there is no French model. PSA and Renault did not take the same choices. It is the lesson of the history, the cohabitation of a company of State (Renault) with a private and family firm (Peugeot). Both groups are in competition for a long time. PSA chooses the external growth by taking the ontrol of Citroën (1975) and Chrysler-Europe (1978). He becomes international with factories in Europe and nº 1 in Europe (1979). Renault prefers the internal growth. But in 1978, he takes the control of AMC to become world. These two strategies finish badly. The crisis obliges both firms to engage a painful policy of reorganization. From 1985 till 1988. Renault and PSA are careful. They prefer the French market wich allows better margins. Then, they go towards the Eastern Europe who open his borders during his collapse. Later, they settle down composedly in Mercosur (a market little different from French and iberian markets). Finally, the look at Asia. PSA and Renault understand the change of markets: Europe is saturated. Its is necessary to become really word. It is the new French offensive. Renault chooses to be bound with Nissan in 1999. PSA refuses the capital-intensive alliances because the Peugeot family wants to keep its business. PSA chooses to multiply the technical cooperations. The biggest firms (BMV, Fiat, Ford, Renault, Mitsubishi and Toyoa) become the partnes of PSA. The assessment is surprising: with the different strategies, Renault and PSA are leaders, Renault-Nissan, the 4th world manufacturer, PSA Peugeot Citroën, the 2nd European manufacturer! The French lesson is called pragmatism.