Peugeot bought Chrysler's European arm for 76 pence and paid dearly
In late 1978 Peugeot's parent company bought the struggling Chrysler Europe, formerly Rootes and Simca, for a nominal 76 pence plus its debts. The bargain turned sour. Relaunched under a revived Talbot badge, the cars faded, and the whole French group lost money every year from 1980 to 1985.
The group itself was born from a rescue. Peugeot took 38.2 percent of Citroen in December 1974 and raised its stake in the bankrupt firm to 89.95 percent on 9 April 1976, creating PSA Peugeot Citroen. With Citroen's new GS and CX models selling well and Peugeot famously careful with money, the combination made profits until 1979. Then came the Chrysler deal, a rebrand to PSA Peugeot Talbot Citroen, and heavy spending to unify an assortment of French and British models under a sports car name unused since the 1950s.
The Peugeot 205 helped pull the company through, lifting PSA above Renault in French sales for the first time in 1983. Talbot passenger cars ended in 1987, and a car planned as the Talbot Arizona emerged as the Peugeot 309. Trouble returned after the financial crisis. GM took a 7 percent stake in a 2012 alliance, then sold it the next year, and in 2014 the Chinese partner Dongfeng and the French state each took 13 percent in a rescue that shrank the Peugeot family's share from 25 percent to 14.
Under new chief executive Carlos Tavares, cost cuts restored profits from 2015 and a new brand, DS, appeared. PSA then went shopping again, buying Opel and Vauxhall from GM in August 2017. GM's European business had lost money for sixteen straight years, and Tavares planned to lean on Opel's German engineering image to reach buyers wary of French cars. In India it paid about 11 million euros for the old Ambassador name.
The final move was a 50-50 merger with Fiat Chrysler, agreed in December 2019 at 38 billion pounds. It closed on 16 January 2021 under the name Stellantis, with Tavares as chief executive.
Source: PSA Group
