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Tavares to lead PSA Peugeot Citroen

Big job: Carlos Tavares will be charged with leading the struggling PSA Peugeot Citroen back to profitability.

Not packing for Detroit just yet, ex-Renault COO Tavares stays in France to lead PSA

Peugeot logo28 Nov 2013

PSA Peugeot Citroen has named former Renault chief operating officer Carlos Tavares as its incoming chief executive, replacing Philippe Varin during 2014.

Charged with pulling Peugeot Citroen out of its current self-declared crisis, Mr Tavares is an ambitious global automotive executive who has been sitting on the sidelines for the past three months after injudiciously revealing his desire to run General Motors or Ford.

The comments, which led directly to his departure at Renault, came during an interview in which he admitted he was unlikely to succeed Renault-Nissan CEO Carlos Ghosn and that he would be “honoured” to lead one of the American auto giants.

While both GM and Ford distanced themselves from the comments, Mr Tavares said he would also consider working for other companies.

PSA said in a statement that Mr Tavares, 55, would officially join its managing board on January 1 and take over from Mr Varin, 61, later in the year.

The company has not specified a date for the official handover, saying only that Mr Varin – who has been in the top job since June 2009 – would continue to carry out negotiations begun with various partners on industrial and commercial projects.

These include discussions to broaden an existing collaboration with China’s Dongfeng.

Other joint-venture programs in place include a wide-ranging product and platform-sharing deal with General Motors and a commercial vehicle partnership with Toyota. PSA also operates a joint production facility in Russia with Mitsubishi.

PSA supervisory board president Thierry Peugeot said: “By choosing Carlos Tavares, renowned automotive industry professional, to succeed Philippe Varin in 2014, the supervisory board ensures that the strategy of recovery and development to overcome the current crisis, a strategy that has been carried out for several years, will continue to be executed over the long-term.”

In July, the French manufacturer posted a first-half operating loss of €510 million ($A762m) for its automotive division, reflecting an ongoing struggle in Europe which had contracted a further seven per cent over the period.

Under Mr Varin, PSA has cut thousands of jobs, closed its Aulnay factory near Paris and heavily curtailed investments. The current CEO said the group saw “the first signs of recovery” in the first half, although Mr Tavares’ role will clearly be to restore PSA back to profitability.

A key factor in this will be reducing its dependence on the European market, which accounted for 62 per cent of its sales in 2012. The company’s stated goal is to reduce this to 50 per cent by 2015, with China, Russia and Latin America targeted as priority growth regions.

As previously reported, Mr Tavares worked for Renault for 32 years, joining the company in 1981 as a test-drive engineer and working his way up through the ranks in key engineering roles before moving into global product strategy and planning for both Renault and alliance partner Nissan.

He became executive vice-president of Nissan and joined the board of directors in 2005, subsequently spending two years as head of Nissan’s operations in the Americas (2009-11) before returning to Renault as COO and second-in-charge next to Mr Ghosn.

He succeeded Patrick Pelata, who was considered a potential successor to the Renault throne before resigning over over his role in a bungled investigation in which three executives were falsely accused of feeding secrets of the company’s electric vehicle development program to China.

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