Are There Too Many Peugeots at Peugeot?

By Damion Rallis, Senior Research Associate

To suggest that French car manufacturer Peugeot SA is mired in a slump would be an understatement. Since 2008, France’s largest and Europe’s second largest carmaker has been methodically destroying shareholder value. Its share price has fallen from over 48 euros in March 2008 to about 28 euros in March 2011 to finally its current share price of under 6 euros, a breathtaking decline of nearly 90%. Some of the decline can be attributed to factors out of Peugeot’s control, as the market for new cars in Europe is at its weakest since 1995. Also, as France is currently governed by the Socialist government of Francois Hollande, Peugeot may very well be the test case determining whether the government will or won’t step in for the rescue. But not all European automobile companies are alike and not all are suffering. At Peugeot, our greatest concerns are related to the company’s board composition and its ownership and control, telltale signs that Peugeot may be in dire need of change. If problems persist, Peugeot’s current ESG Rating of “C” could soon be downgraded.

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