Peugeot's macro-environment developments and its effect on business

In this article, we describe PSA's corporation macro - environment in the broad sense of the word : it affects the firm businesses but PSA itself has no influence on. 

We can detail the macro - environment thanks to a P.E.S.T.E.L model :

Politics : 

The new anti-pollution regulations have forced french manufacturers to upgrade their range of car models (especially in the western countries) in order to decrease fuel consumption and G.E.S release. 

From a geo-political point of view, we can take the example of China : The U.S – China diplomatic relationship which was re-etasblish in 1970s under Nixon administration, illustrates the intertwined nature of home and host governement policies. As a result, the Chinese government finally opened its economy to foreign direct investment in the 1980s the first pioneer foreig companies have stood to gain from the host government policies designed to protect the domestic producers they teamed up within China. Thus, PSA, with their respective chinese partner companies were such beneficiaries. 

Economics : 

 Because of the struggling economic conditions of these past few years, the automotive sector has known a sharp decrease in sells in such magnitude that other constructors has been forced to shut down their activities. PSA has not been spared by this crisis but the company decided to promote their development in new emerging market such as China or Brazil. Their objective is to extend their market shares outside of Europe. That is why nowadays, 58 % of PSA vehicles are sold outside. For instance, China has become the number 2 market of PSA in terms of car sell. 

They have also decided to make significant effort to match new pollution regulation norms in the Europe area where the consumers are ready to buy more expensive cars. 

Social cultural : 

A evolution of patterns of thought has led to changes in consumption behaviour. In recent years, numerous car models such as 4x4 or S.U.V has emerged based on new consumer needs and more and more people are willing to buy these models. At first, PSA did not have this type of cars in their catalogue but they successfully managed to adapt to the market and thus improve their competitivity on that specific demand. They have also ordered marketing studies (2009) which resulting in the diminution of their vehicles fleet from 45 down to 26 cars that you can buy. At last, they have also exported the french know-how in new markets and consumers are falling for it. 

Technologic : 

 PSA as a group keeps investing a lot of money on R&D and almost 5 % of their turnover have been re-injected in R&D in 2013. The company is developping new exhaust pipes to reduce G.E.S as well as bio-fuells or new materials, lighter to decrease gas consumption. They are re-thinking all their model and try to turn all of them into more efficient vehicles. One of the company’s motto is « Promoter of sustainable mobility ». We can also highlight the fact that their number of pattents keeps increasing. 

Ecologic : 

This is a burning issue especially for car manufactures. Thanks to global awareness on climate imbalance, automotive industrials have, for most of them including PSA decided to engage against pollution. They are working on HEV as well on all-EV with new models such as Citroën C-Zero & Peugeot Ion. They have also implemented new materials more eco-friendly in their car-frames. 

Legal :

The car industry is largely influenced by the legal-frame with all the law on speed-limit but also the implementation of drastic laws in terms of security and manufacturers must comply. They are also impacted by governement measures : we can think of the scrappage bonusses or more recently the environmental bonusses. If you want to buy an EV in France, nowadays you don’t get financial help anymore from the government.