Citroen

Citroen

Citroen

Analyzing the Organization of Citroen

Q1- What is the Autorité des Marchés Financiers? Explain why it was established in 2003 and describe its role in the development of financial reporting in France.

Ans. In the year 2003 Citroen erupted into a nasty bloodletting that saw several top executives issued their walking papers.

A fire sale followed a year later, as Rover car operations were peddled to investment firm Phoenix Consortium for a meager $16 and Land Rover signed over to Ford Motor Co. for $3 billion.

The moves made it clear Citroen's controlling shareholders, the Quandt family, were losing patience, and new rumors were spawned that Citroen would be sold. Since then, the maker of the "ultimate driving machine" has rediscovered its roots. Having abandoned Rover, and with it the distraction of selling high-volume, low-margin cars, Citroen now has its full attention back on what it does best - performance machines.

The results have been dramatic. Citroen Group sales rose to a record $33 billion in 2000, and Citroen -brand revenues jumped a whopping 20.5 percent. And the new model game plan - which includes the upcoming, highly publicized Mini, a new entry Citroen calls the 1-series and a couple of new crossovers, plus a Rolls-Royce to fill out the top end - holds far more promise than the one circa 1998, when Citroen appeared tragically bent on becoming a full-line car producer.

Volume as an end in itself is not the objective. Rather, what we want is profitable growth, with `profitable' coming first and `growth' following second. What matters is strength, rather than sheer size.

The risk is that the automaker goes too far down market on its own, tarnishing the highly respected Citroen brand. That fear is what prompted Citroen to buy Rover in the first place. But top executives no longer see it that way. The move into the pricing stratosphere with Rolls-Royce, a brand Citroen will acquire from Volkswagen in 2003, also represents new territory. The rapid turnaround has paid off in spades for investors. In the past year, Citroen shares gained 15 percent. And higher profits are promised for 2001.

All that is making the Quandt family happy again and quieting speculation Citroen needs a partner to survive.

Going Upscale Produces Winning Results

Last year, about 74% of the company's new car sales--totaling 3,115 units--came from import nameplates. The groundwork had been laid more than a year ago. The upscale import dealerships enabled Pittman to successfully navigate last year's rough economic terrain. For instance, at his Bowling Green franchise, Pittman's Citroen models produced a record-selling year and the Mercedes-Benz models gave him access to a new cadre of affluent car buyers.

Q2- The European Union's Fourth Directive allows four income statement formats., Explain the structure of PSA Peugeot Citroën's income statement on page 190 in terms of the

options allowed under the Fourth Directive and IAS 1.

Ans. The PSA segment of Citroen [vehicles] are the last people to get hit in a ...