Among the large companies currently included in the calculation of large stock market indices such as the CAC 40
, there are often car manufacturers. This is the case for France with companies like Peugeot Citroën, whose shares are particularly popular with investors. If you are one of the traders interested in these stocks, here are some things to know before you get started.
General presentation of the Peugeot Company (PSA)
The Peugeot share is a stock security issued by the PSA Company (Peugeot and Citroën) and listed on the European stock market, Euronext. This private sector company is of course a famous French car manufacturer who supplies the market with Peugeot and Citroën brand automobiles.
The Peugeot Citroën group is the result of the merger of two French car manufacturing giants and generates extremely high turnover. Its activity is distributed in various sectors including the sale of vehicles, as well as the sale of automotive parts and even financing services of its vehicle sales.
It's important to know that the group comes in second place in the ranking of European manufacturing companies, just after its German competitor Volkswagen. Although the headquarters of the group is located in France, it extends its activity around the world, mainly in Europe, but also in Latin America and even in Asia.
The automotive division of the group alone generates over 71% of the turnover and the automotive parts division generates 22.2% of this turnover. The group also carries out financing activities amounting to 6.1% of its turnover.
From a geographic point of view, the group generates 22% of its turnover in France, 56.3% in the rest of Europe, 6.2% on the Asia-Pacific market, 5.7% in North America, 5.2 % in Latin America, 3.8% in the Middle East and Africa and 0.8% in Eurasia.
Know the Peugeot (PSA) share competition:
The PSA or Peugeot-Citroën group is positioned among the international leaders on the car manufacturers market. However, competition in this sector has been growing stronger in recent years. That's why it's important to know the company’s main competitors in order to be able to correctly analyse its share on the stock market and take a strategic position. So, here is the list of the main competitors of PSA (These companies are all listed on the Stock Market so it's easy to find information on them such as the publication of results or the various news likely to influence the competition in this field):
- Fiat Automobiles
- The Ford Motor Company
The strategic alliances set up by the Peugeot group (PSA):
The PSA group has always been able to reach out to companies likely to make it progress and gain market shares. Here are the main partners that you should get to know in order to assess the scope and possible influence on the price of its stock security:
- Santander: the Santander banking group has partnered with PSA finance in order to take charge of the financing of Peugeot, Citroën and DS vehicles since 2014.
- Ericsson & Orange: PSA has also set up a partnership with Ericsson and Orange in order to develop a 5G connected vehicle model. This partnership was established in 2017.
- Ford: PSA is also Ford's partner in the design of diesel engines and extended this association in 2017.
- BNP Paribas: Finally, the PSA Group and BNP Paribas recently announced a long-term strategic partnership in automobile financing, in connection with the joint acquisition of the financial activities of Opel / Vauxhall
- FIAT: In 2019, the PSA group began discussions with the Fiat group in order to set up a partnership aimed at sharing production investments for vehicles on the European market.
- Tata Motors: PSA has also recently set up a partnership with the Indian group Tata Motors aimed at producing and selling its vehicles on the Indian market.
Introduction and stock quote of the Peugeot share (PSA):
There are currently almost 1,800,000 Peugeot Citroën shares on the market. These shares are listed on the NYSE Euronext and included in the calculation of the CAC 40 index.
Having suffered a drop in their productivity in 2013 and in 2014, the group's share rose during 2015, almost reaching € 20. Then suffered a correction towards 10 € in June 2016. Since then, the PSA share has picked up many points and is now evolving within a strong upward trend with several peaks beyond 24 € in November 2018 and April 2019.
Stock market data
To complete this article we've compiled some general data for you about the share, its quotation on the stock market and the Peugeot Citroën Company’s place in the world of finance. You'll be able to use this data to measure the stock market positioning of this asset and implement targeted strategies by taking all the elements into account.
- In 2019, the PSA group posted a total market capitalization which reached 19,209.50 Million EUR.
- The number of securities issued by the Peugeot Citroën group and currently in circulation on the market is around 904,828,213.
- The Peugeot Citroën share price is currently listed on compartment A of the Euronext Paris market in France.
- The Peugeot Citroën group is also part of the French national stock market index CAC 40 and is therefore one of the 40 stocks in France with the highest market capitalization.
- Peugeot Citroën shareholders are made up of 45.03% of shares held by foreign institutional investors, 12.23% of Dongfeng Motor International Co shares, 12.23% of Lion Participations shares, 12.23% of shares held by the Peugeot family, 8.39% of shares held by French institutional investors, 2.03% of shares held by group employees and 1.25% of treasury shares. The rest of the company's assets are traded by private individual investors.
The Peugeot Company PSA was created in 1965, but it wasn't until the company merged with one of its French competitors, Citroën, that the group as we know it today was born, in 1976. Everything had started well for the company, which even treated itself to buying the Chrysler brand in 1979. But quickly, the group recorded its first losses with a great wave of job cuts in 1983, making an enemy of most trade unions.
To counter these losses, the Peugeot group decided to significantly reduce its production costs by creating more accessible but lower-end car models with the same manufacturing elements.
The strongest surge of the Peugeot group was in 2003 thanks to the launch of several car models which met a huge success, like the 206 diesel.
But Peugeot's production remained difficult to understand since the company had created partnerships with several of its direct competitors like Renault or Fiat which supplied mechanical parts.
The advantages and strengths of the PSA share as a stock market asset :
The PSA group's first asset is of course its position on the national and European market. Indeed, the company enjoys a leading position in the automobile manufacturing sector in France and is number two on the European market just after the German group Volkswagen. The Group also ranks seventh in the world in this sector, thanks in particular to its diversified ranges with the Peugeot and Citroën brands for the mid-range and DS for the top end, and to the diversification of its activities through its subsidiary Faurecia, which specialises in automotive equipment. The Group also offers financing services.
In recent years and after going through a period of major crisis, the Peugeot-Citroën group has managed to become more competitive at the industrial level. It has modernised its production sites with modular platforms, reduced the number of vehicle models and increased the utilisation of production capacity. Differentiating its three main brands with the DS premium brand now gives it a better marketing positioning in the various segments.
The PSA Group also benefits from an avant-garde strategy with regard to the current issue of energy savings, particularly with regard to its small vehicles, which places it at the forefront of innovations in this area of the future.
The positioning of the PSA group on different markets from a geographical point of view is also interesting. Indeed, the company retains a strong position in Europe where it still achieves more than 2/3 of its sales but is also very well positioned in China, a buoyant market par excellence and in South-East Asia where it now achieves nearly 19% of its sales. A fourth plant was built in this area in 2016 with the aim of building no less than 1.5 million vehicles by 2020.
The PSA Group's innovation capacities are also to be counted among its assets. Indeed, in France, PSA is today the first patent applicant, which ensures a strong positioning in the future.
As explained above, PSA is diversifying its activities with, in particular, corporate banking services. Its recent alliances with the Santander and Consumer Finance groups and companies in this sector enable it to further improve profitability in this area and expand its market to Spain, Brazil, Switzerland, the Netherlands and Italy.
We will also keep a close eye on the impact of the alliance that PSA has set up with the Bolloré group for the design of an electric car-sharing vehicle to be distributed by the Citroën subsidiary but developed by PSA.
Lastly, after a temporary halt, the dividends have been distributed again by the group since 2017.
Disadvantages and weaknesses of the Peugeot-Citroën share as a stock market asset :
Firstly, the current slowdown in global growth must be taken into account, which of course slows down consumption and affects the automotive sector in particular. In Europe, this same automobile market is still suffering the adverse effects of the Diesel Gate scandal, which is also impacting PSA sales.
This recent scandal has in fact led to a number of additional regulatory costs in the euro zone and the emergence of certain doubts about the quality of manufacturers' CO2 emission reduction processes.
While the PSA group targets the emerging markets of Asia rather well by successfully positioning itself in the most important countries, there is currently a sharp decline in the automotive sector in these areas, particularly in Eurasia and Asia-Pacific, which could rapidly slow down sales.
Lastly, the PSA Group remains particularly exposed to the decline in the pound sterling against the euro and the resulting drastic drop in sales in the United Kingdom. The UK accounts for around 8% of the Group's sales.
It is therefore advisable to moderate the positive assessment made above by taking into account the risk represented by these few defaults in value.