Peugeot is facing further finical struggle as shares drop down to €5.45; a new low for the company since 1986. Peugeot have approached the government in further borrowing of €7bn to try and rescue the company, but cash doesn’t come freely. What will Peugeot do in return?
Peugeot have already scrapped more than 10,000 jobs and a domestic plant to stem losses approaching €200m a month, while developing future vehicles with General Motors to deliver more savings in five years’ time.
Peugeot is not the only struggling automotive company, the decline in demands have affected other car giants such as ford, GM and Fiat.
The decline in demands could be linked to the increasing Asian automotive market. Also, cars are discretionary expenses to many individuals and this type of spending reduces in a recession as people tend to refrain from spending on luxury items while there is unemployment riskand decrease in wages.