Peugeot Citroen improves standing with suppliers

13 January 2011
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13 January 2011 | Lindsay Clark

Suppliers to PSA PeugeotCitroen have told researchers the carmaker is getting better at managing relationships. 

“We have seen substantial improvement in PSA’s relations with its supply base compared with 2009 lows,” said Matteo Fini, lead researcher at SupplierBusiness. “This is linked to the pricing policy, payment terms and volume planning. Each of these aspects is supported by some anecdotal evidence. Nonetheless it still has many areas on which it needs to improve to get suppliers more eager to win contracts with them.”

SupplierBusiness, part of IHS Automotive, said important changes were under way in PSA’s purchasing strategy since a new CPO, Yannick Bezard, joined last September. It also noted that supplier relationships must become a source of competitive advantage, according to PSA chief executive Philippe Varin.

Suppliers had awarded PSA an index score of 557 of 1,000 in 2010, up from 508 in 2009, according to the survey of 192 executives representing 2,900 supply contracts.

There are still some aspects where the carmaker needs to record improvements in order to catch up with competitors who are preferred by suppliers, such as the Volkswagen group, which remains a benchmark for PSA in a number of areas, the research note said. “PSA intends to develop relationships with a smaller group of selected suppliers, resulting in greater savings and more innovation received from the now 20‐strong strategic supplier community. Other major suppliers will benefit from a new process to implement supplier‐generated innovations, which are at the core of PSA’s more upmarket brand positioning,” the research said.

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