Under the leadership of Carlos Tavares, the PSA Group has gone from near oblivion in 2012 to success. The CEO and Chairman has single-handedly forged the merger with FCA, focused on profits and is literally unstoppable.
It will not be wrong to say that 2020 has been a year of pandemic, paradoxes and possibilities. A year fraught with challenges like never before, mediocrity has no place and businesses are battling left, right and centre to stay afloat. Amidst all this, Carlos Tavares, the Chairman of the Managing Board and CEO – PSA Group, was named the ‘2020 World Car Person of the Year.’
So, what convinced 86 World Car Awards jurors from 24 countries collectively, who cast their vote via a secret ballot? Well, as one of the WCA jurors stated, “His calm, dignified, modest and highly effective approach puts some other executives to shame. At the heart of (his success) is an understanding of customer needs, but it's all backed with incredible business acumen.”
What’s the secret of Tavares’ dynamism and the almost unstoppable force driving PSA’s journey? In his own words, Tavares said, “Because among our values ‘win together, agility, efficiency’ includes the strength of the collective power, it is in the name of all of us that I accept your honour with humility.”
Tale of grit and gumption
Heading the world’s fourth largest automobile entity, Tavares played a critical role in bringing about the merger of Groupe PSA with Fiat Chrysler Automobiles (FCA) which is expected to be done by the end of the first quarter of 2021. The merged entity, ‘Stellantis’, derives its name from the Latin word ‘stello’ which means ‘to brighten with stars’.
There is no question that Tavares has been the leading light of the global automobile industry. It has been a dramatic turnaround from the time he took charge as Chairman of the Managing Board in March 2014 when the going was tough for the makers of Peugeot and Citroen then. Since the time of the global slowdown in 2008-09, the French automaker had faced severe headwinds which caused it to drop its India project scheduled to be commissioned in Gujarat among other restructuring initiatives.
A tie-up with General Motors was attempted with little success and finally it was Dongfeng Motors of China which threw a lifeline to PSA and subsequently picked up a significant stake in the company. Yet, it is to Tavares’ credit and single-minded focus that saw PSA climb out of the abyss gradually. There was some severe cost cutting along the way with a far more pragmatic roadmap on the number of models and platforms.
Who would have thought that the same beleaguered company would now acquire brands like Opel and Vauxhall from GM? Today, PSA is confident that it will now build its European presence with these buyouts and Tavares will personally ensure that the synergies derived as a result will be optimised to the hilt.
Even in a world scarred by Covid-19, Groupe PSA’s global October sales numbers, up over four percent year on year, convey a lot about the 62-year old’s deep understanding of market dynamics. To combat faltering sales in existing markets, Tavares’ ingenious recovery plan pretty much followed what the famous US philosopher Emerson once said, “Do not follow where the path may lead. Go instead where there is no path and leave a trail”.
It explains why he is now keen on seeing Groupe PSA go global with a vengeance. Over the past few years, he has targeted the ASEAN region as an important beachhead while India will, likewise, play a big role under the Citroen umbrella. Quite wisely, Tavares has decided to steer clear of the Peugeot association, given its previous outing over two decades earlier when the company abruptly shut down its India operations.
Peugeot will be part of the script for North America while the merger with FCA will only add more ammunition to this drive. China clearly is not quite firing on all cylinders yet but a revival strategy is in place. Despite this flurry of activity, it is quite obvious that Tavares has his feet firmly on the ground. He is pragmatic about the road ahead which is fraught with challenges like e-mobility and the huge investments involved. Given what he has achieved over the past few years, it would be fair to infer that bigger things are on the way especially with a combined PSA-FCA twosome.
This was first published in Autocar professional's 16th Anniversary issue on December 15, 2020.