SWOT Analysis – Peugeot in India and China 1. Internal Peugeot Group Strengths * Quantitative performance: * Over 3 million cars sold worldwide in 2009. * Over 1 million cars sold outside Europe in 2009. * World market share of 5%, Europe 13,8%. * Sales increased 52% from 2008 to 2009 in China. * Committed to increase market share in China to 8% in 2015-16. * Double digit growth expected for sales in China this year, objective to sell 320,000 cars, the double of 2008 figure. * Qualitative performance: * Second largest car maker in Europe. Strategy well defined for the next years, emphasis in emerging countries: China, Russia and Latin America countries. * Agreement signed to build new joint venture in China – Chang’an * Strong strategy and investment in R&D. * Long experience in China, since 1985. * Well established with 2 facilities in China, a third one is being considered. Also a R&D and style center in China. * Resources: * Company supported by financing houses – Banque PSA Finance. * Strong structure – 15 engineering plants and foundries, 4 research centers. * Brand Image: More than 100 years of tradition. * More than 160 models in the history. * Present in over 150 countries. * Good positions in the European Car of the Year award. * Wide range of products. * Valued company values: Confidence, passion and inspiration. Weaknesses * Quantitative performance: * Vulnerable against crisis, losses of 343 Million euro in 2008. * Europe car market expected decrease 7% in 2010. * Market share in China of 4%, while VW has 17% and GM 10%. * Qualitative performance:

* High price comparing with competitors * Peugeot had already to leave from China once. Peugeot was unsuccessful in India. * Resources: * ???? * Brand Image: * Bad image in India due the way it had to leave from the country. 2. 1 External – China Opportunities Macro- environment: * Economic factors: * 2nd biggest economy of the world. * Estimated to be the biggest economy of the world in early 2030. * Average growth rates of circa 10% for the past 30 years. * Largest exporter and second largest importer country. * Low poverty rate of 15% in 2005 compared with 85% in 1981. * Demographic factors: * Biggest population of the world with circa 1,3 billion people. Largest potential market. * Largest labour force, estimated in 791 Million people. * Low labour cost. * Institutional factors: * Economic activities supported by the government. * Government present – Economic Stimulus Plan. * Strong government pressures for workers to stay in line. * Ecological factors: * Abundance of resources: coal, honey, ore, petroleum, natural gas, mercury, tin, tungsten, antimony, manganese, lead, zinc, molybdenum, magnetite, aluminum, uranium and hydropower. * Technological factors: * High priority for transportation infrastructure.

High regard for science and technological modernization. * Cooperative relationship with developed countries. * Social-cultural factors: * Strong family network Micro-environment: * Market size and structure: * Biggest car market and car maker of the world. * Strong demand even during the crisis. * Fastest-annual-growing car market, circa 22% from 1998 to 2006 * Enormous potential for growth: 6 car owner per 100 people, while in U. S. it is 90. * Small cars represents circa two thirds of the sales. * Forecast of being twice the size of U. S. car market by 2020 – GM. * Competitors: ???? * Customers Behavior: * Foreign brands more valued by customers. * Distributors * Infrastructure favorable. Threats Macro- environment: * Economic factors: * Communist system. * Considerable part of population still below the poverty line. * Demographic factors: * Lower population growth rate than other emerging countries. * Growing inequality. * Institutional factors: * Extensive consultation and negotiation for policy-making process * Economy highly supervised and regulated. * Unreliable legal system. * Policies aimed at encouraging local companies and their brands. Ecological factors: * Increasing pollution and degradation of natural resources. * Technological factors: * Transportation infrastructure still not fully developed. * Social-cultural factors: * Potential social unrest. Micro-environment: * Market size and structure: * Increasing market share of Chinese brands, 14% in 2004 to 30% in 2009, forecast of 40% in 2017. * Joint ventures well-established between local and multinational companies. * Competitors: * Environment highly competitive.

* Rising quality of Chinese brands. * Strength growth of Chinese brands. * Customers Behavior: * ???? 2. External – India Opportunities Macro- environment: * Economic factors: * 11th economy of the world, with PPP method it is the 4th. * Average annual GDP growth of 5,8% in the past two decades. * Declining poverty: from 42% in 1981 to 24% in 2005. * Burgeoning middle class: ten-fold growth expectative by 2015. * 60-70 million new households able to afford a car by 2014-15. * Market well positioned for growth. * Declining interest costs, favorable rates for the consumers. * Demographic factors: * Second largest labour force, with 516 million people, estimated to reach 882 million in 2020. Low labour cost. * Domestic demand and export opportunities. * Institutional factors: * Offer of land to the establishment by the local government. * Policy of the government aimed to promote an integrated, phased and self-sustained growth of the industry, in 2002. * Low entry barrier. * Lower duties and taxes. * Ecological factors: * World`s fifth largest gas vehicle fleet. * Concern for emission (world`s standards). * Abundance of resources: coal, iron ore, manganese, mica, bauxite, chromite, thorium, limestone, barite, titanium ore, diamonds, crude oil. Technological factors: * Incentives for in-house R&D. * Social-cultural factors: * ???? Micro-environment: * Market size and structure: * Compact car segment is the largest by volume. * Steadily growth of exports of passenger’s vehicles. * Vehicle finance penetration rising steadily over years. * Production of passengers vehicles growing approximately 17% per year over the last 5 years, significantly more than two wheels and commercial vehicles. * Competitors: * Passenger’s vehicles have only 16,4% of the market share. * Three major players in the passenger`s vehicle market. Customers Behavior: * ????? * Distributors * Large shore, favorable to exports. Threats Macro- environment: * Economic factors: * 41,6% of the population is below of the new poverty line of $1,25 per day. * Reversal of trends of the financial aspects during 2008-09 due to the crisis. The previous level still hasn`t been reached. * Worldwide economic situation, investors are more cautious * Institutional factors: * Complex law system. * Social-cultural factors: * Caste social system. * Ecological factors: * Raw material prices are shooting high day-by-day.

Micro-environment: * Market size and structure: * Two wheels vehicles still dominate the market share. * Competitors: * Strong and well positioned competitors like Suzuki, Hyundai and Tata. * Customers Behavior: * Key driver in choice is the price * Distributors * Infra-structure problems. China: * Fighting Poverty: Findings and Lessons from China’s Success (World Bank).

Retrieved August 10, 2006. * “Average W age of On-Duty Staff and Workers in Urban Areas Jumped in the First Three Quarters”. National Bureau of Statistics of China.? 007-10-29, 1 * www. chinaknowledge. com * http://www. thetruthaboutcars. com/2010/10/new-trend-in-china-chinese-cars/ * India: * http://www. siliconindia. com/shownews/World_Bank_criticizes_India%E2%80%99s_labor_laws_-nid-29498. html * http://www. fibre2fashion. com/industry-article/18/1792/china-vs-india-comparative-analysis-of-their-strengths1. asp * The automotive industry in India, Mr. Rahul Sanyal – http://www. teknikforetagen. se/upload/eng/automotive_industry_in_india. pdf * IBEF – India Brand Equity Foundation BY Gabriel V. Junqueira


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