Sunday, November 27, 2011

Peugeot France has last 200 million Euros in the last year

So this story went highly unnoticed by the US Motorcycle press, but I felt the need to re-post it. First it shows exactly what I have been blogging about for the last 3 years since I visited all of Kymcos operations in Taiwan. Second it shows the uphill battle European makers are facing ( see previous blogs on the Derbi factory being closed, Malaguti Scooters closing, and the trouble with Piaggio producing in Italy )

Even a major factory like Peugeot cannot sustain European production of low margin 50cc units. The article is stricking for the mere fact that the company lost 200 million Euros last year and that since 2007 most of its production has been shifted to mainland China. Thats a joint venture with Qingi which I reported on before the previous US importer for Qingi aka Qingi USA / Verucci USA is now gone since they closed full time operations in Miami, but again many of those parts are available from MRP.

Verucci is our former neighboor being a few blocks away, but they underwent the same fate many importers did with the financial crisis and EPA cracking down hard on Miami scooter importers. In any case Peugeot has tied its future to Qingi and even with those low priced scooters has been unable to compete with Kymco who just secured a 3,500 unit order from the French post office.

Maybe our bankrupt postal system could learn a thing or two from France and get Postal workers in Key West and Miami Beach to deliver mail on delivery scooters that cost $3,000 instead of Trikes or Karts that cost US tax payers between $36,000 and $49,000 plus maintenance fees of $4,000 per unit. Maybe Kymco USA could come with a solution for them to save some money?

From CNA Taiwan:
Paris, Nov. 26 (CNA) The French Post Office's procurement of 3,000 50cc KYMCO scooters from Taiwan sparked a protest at a Peugeot Scooters factory Friday, as the deal has affected the factory workers' job prospects, according to a report on the Le Pays newspaper website. The report said the state-run post office's decision to place the big order with Taiwan's Kwang Yang Motor Co., which sells its motorbikes under the brand KYMCO, was like ringing the death knell for France's struggling motorcycle industry. The French Post Office, previously Peugeot Scooters' major client, decided late last year to switch its business to Kwang Yang. However, the news did not break until recently, prompting workers at the motorbike company's factory in Dannemarie in northeastern France to stage a protest, Le Pays said. According to the newspaper, Peugeot Scooters was scheduled to close its Dannemarie factory at the end of 2012 and transfer all of the plant's 140 workers to the company's other sections. In fact, the company, a part of PSA Peugeot Citroen -- the second largest carmaker in Europe -- had already laid off 250 workers at its Dannemarie and Mandeure plants in 2008. Another French daily Le Figaro reported earlier this month that Peugeot Scooters had relocated two-thirds of its production to China since 2007 in an effort to cut operational costs. Up to 90 percent of Peugeot motorcycles and scooters are sold to European countries, but annual motorbike sales in that market have dropped by 40 percent since 2007, the report said. Peugeot Scooters lost over 200 million euros last year, it added. Meanwhile, BFM Business radio station said the French Post Office's procurement of KYMCO scooters has had little impact on jobs at Peugeot Scooters because the company has continued to secure orders for its 125 cc scooters, which offer better profit margins than the 50 cc models. Asked about his views on the French media's discussion about KYMCO's successful foray into the French scooter market, Taiwan's representative to France Michel Lu said small scooters are a highly competitive product. "Kwang Yang's success in winning the order from the French Post Office indicates that its scooters' price, design, quality and performance have won consumers' recognition," Lu said. Blue-chip Taiwanese companies can grasp business opportunities through fair competition, he added. In Taipei, the United Daily News (UDN) reported Saturday that Europe has been Kwang Yang's major export outlet and that KYMCO has become a popular scooter brand in the European market, drawing wide attention at major European motorcycle trade fairs. In July 2011, Kwang Yang signed a new engine OEM project with BMW, indicating that the company's motorbike engine production technology has won recognition by the German motor vehicle giant, the newspaper said. According to the UDN report, Italy, Spain, German and France have been the Kaohsiung-based company's major export outlets. Its ATV multifunctional vehicle now holds more than a 30 percent share of the French market, the report said. A group of French Post Office executives visited the company earlier this year to confirm the details of the 50 cc scooter deal, the report said.

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