PSA Peugeot Bolsters U.S. Market; Dodges Takeover So Far

PSA Peugeot-Citroen, the French automotive group, is to invest US$3 billion this year in new car models and engines in a bid to return to the U.S. market and shore up its independence in a fight against potential predators. "In the long run we cannot be absent from the U.S.," says Jean-Martin Folz, chairman of the PSA management board. "We have to prepare to return there." Folz is relying on technology and component-sharing partnerships with Ford, Renault, and Fiat in engines, multi-purpose vehicles, and diesel technology to ward of the threat of becoming a takeover target. Clearly hinting at Ford's recent acquisition of Volvo Cars, the French manager said: "Mergers run the risk of suppressing healthy brands and surrendering market share." In recent months there has been mounting speculation that Ford and DaimlerChrysler are sharpening their claws in readiness to pounce on PSA. "But our brands -- Citroen and Peugeot -- are not vulnerable," says Folz. "Only weak and unprofitable companies will be forced to consolidate -- not PSA. Other car makers are talking about cutting costs. Our talk is about increasing profits."

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