PSA to Simplify Lineup in Bid to Boost Margins

PSA Peugeot Citroen says it will reduce the number of models it offers to 26 from 45 by 2020 and improve its operating margin to 2% of sales by 2018.

The company has lost a €7.5 billion between 2012 and now. Carlos Tavares, who took over as CEO in late March, aims to hike the company's margin to 5% in 2019-2023.

PSA also announced it will create a separate brand for its DS line of Citroen premium small cars, as widely expected. The company relaunched the DS name in 2010 in Europe with the DS3 supermini and has since added several other DS variants.

PSA has been pushing the DS line in China with partner Changan Automobile Group through a network of DS-specific dealerships. Tavares says the company will continue to pursue its aggressive marketing push for the DS line in China.

He adds that streamlining the company's product lineup will help clarify its marketing plan enable PSA's operations in Russia and South America regain profitability by 2016.

Tavares tells analysts the company needs to reject its current mindset of selling cars at a loss if necessary to cover fixed costs and replace it with a "profit culture."