In good times, ensuring partnerships succeed is hard work; in tough times, you need real ‘stickability’. Undeterred by economic circumstances (and mounting losses), not to mention the management time required, PSA keeps adding to its list of partners; and when one partnership ends, it quickly finds another.
PSA’s partnerships range from the ‘old’ (Renault: transmissions), ‘new’ (GM: strategic alliance), ‘borrowed’ (Mitsubishi: EVs and ‘soft-roaders’) and ‘blue’, such as with Fiat in MPVs and mid-size vans which is nearing its end.
As its involvement with Chrysler has deepened, Fiat has withdrawn from the Sevelnord JV, first switching MPV sourcing to Chrysler, and then more recently announcing it would stop taking the Scudo van
Several partnerships are working well, like its other partnership with Fiat in mini and large vans in Turkey and Italy respectively, and with Toyota in A-segment cars; these should all continue for at least one more model cycle. But will PSA’s latest partnership with Toyota, also on mid-sized vans, be a success?
For over 20 years, PSA and Fiat produced MPVs and mid-sized vans at Sevelnord, a PSA-managed plant at Valenciennes, northern France (Sevelsud, the companies’ large van JV in Italy, is run by Fiat). As its involvement with Chrysler has deepened, Fiat has withdrawn from the Sevelnord JV, first switching MPV sourcing to Chrysler, and then more recently announcing it would stop taking the Scudo van.
On July 11, Automotive World reported that current production would run until the end of 2016. But after this news (leading some to infer that PSA would close this plant), Toyota announced that it would source 5-10,000 vans a year from PSA; however, this agreement was immediately followed by reports that PSA wants public money to keep Sevelnord going.
Supply for Toyota starts next year and is due to include the next generation van, with Toyota contributing to the development costs. But what happens next? Will this plant close and the next mid-sized van be produced at another PSA plant, possibly Rennes? Or will the French government provide PSA with the financial aid it reportedly needs to keep the plant open?
Sourcing vans from PSA gives Toyota a chance to establish a presence in the European van market through its own marketing efforts with a proven European product; it’s now a matter of convincing consumers.
In the short term, the Toyota deal gives Sevelnord additional volume. However, Toyota has only ever had only a minor position in the European van market, selling fewer Hiace vans than the proposed volumes from the new partnership. Nissan is the only Japanese OEM with a worthwhile presence in the European LCV market (largely with re-badged Renaults); Nissan’s self-developed NV200 shows it has accepted that European van buyers don’t like narrow, flat-fronted Japanese vans. The most recent Toyota Hiace was more European (wider and with a nose, rather than a flat-front cab-over-engine design), but by the time Toyota had designed a van with more than a cursory nod in the direction of European consumers, the market was sewn up by the European OEMs.
Sourcing vans from PSA gives Toyota a chance to establish a presence in the European van market through its own marketing efforts with a proven European product; it’s now a matter of persuading consumers. If they are convinced, the additional volume could justify extending this partnership into a new model cycle. If they are not, the partnership could be very short-lived indeed.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Ian Henry is a director of AutoAnalysis, an independent automotive research and consulting company based in London.
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