Automobiles Citroen

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Automobiles Citroen

62, boulevard Victor-Hugo
92200 Neuilly-sur-Seine (Hauts-de-Seine)
France
(1) 47 48 32 52
Fax: (1) 47 48 40 68

Subsidiary of PSA Peugeot-Citroen Group (90%)
Incorporated: 1924 as Societe Anonyme Automobiles Citroen
Employees: 58,700
Sales: FF 68,800 million
SICs: 3711 Motor Vehicles & Car Bodies

One of the world’s first automobile manufacturers, Automobiles Citroen is today one of two car manufacturing divisions of France’s PSA Peugeot-Citroen Group, the largest private car manufacturer in France. With manufacturing or assembly plants in 12 countries, Citroen has worldwide sales in 85 countries.

Andre Citroen established the company’s precursor, the Citroen Gear Company, in 1913. In order to work smoothly, the teeth on the gears had the form of chevrons, the shape that became the emblem of the Citroen name. Andre Citroen soon began importing modern industrial working methods to France, allowing him to produce economical cars in large quantities. In 1916 M. Citroen began preparations to convert his Paris munitions factory on the Quai de Javel into a car factory. By the end of 1919, the factory was producing thirty cars a day.

The factory produced the Type A, appearing in June 1919, the first European car to be mass-produced and the first low-cost car to be sold fully equipped (with, among other things, electric starter and lighting, hood, spare wheel, and tire). It was also the first car designed with the intention of reaching the popular market.

In 1920 Citroen’s fame took off at rapid speed after the company won the fuel economy grand prix at Le Mans. As a result, the company greatly increased its rate of production; from a total of 2,810 cars built in 1919, the company had a production total of 12,244 in 1920.

Citroen first became known in foreign markets in 1921, when it exported a total of approximately 3,000 cars. This move sent the company on a long trek of expansion through numerous international territories throughout the century. Andre Citroen established the basis of a network of subsidiaries in Brussels, Amsterdam, Cologne, Milan, Geneva, and Copenhagen in 1924; the company exported a total of 17,000 vehicles during that year.

Also in 1921, the company took another turn that was to establish its direction for decades to come. It produced three types of “half-trucks,” the B2 engine-powered-model which was to accomplish the first vehicle crossing of the Sahara. This mission, led by Haardt and Audouin Dubreuil, left Algiers in December 1922 and arrived successfully in Timbuktu in February 1923. In the ensuing decades, Citroen gained world renown by participating in motor expeditions, rallies, and mass treks across desert landscapes in both Asia and Africa.

In 1922 the company began offering credit sales, with repayments spread over 12 or 18 months. These arrangements helped to jumpstart the popularization of the automobile throughout France. Also in 1922, the company presented the 5CV Type C, a model that contributed to the “democratization” of the automobile because it was economical and easy to drive—so easy, in fact, that it was dubbed the first “ladies’ car.” The model was mostly painted yellow; hence, its popular nickname was “petite citron,” or little lemon.

The year 1924 marked the official beginning of Automobiles Citroen. Andre Citroen founded the Societe Anonyme Automobiles Citroen with a capital of FF 100 million. In the same year, the company presented the BIO, the first automobile to have an all-steel body instead of the conventional mixed wood-and-steel construction. Made of cold-pressed panels welded together, the new body offered much better resistance to impact. Production increased in 1924 to 300 vehicles per day, for a total output that year of 55,387 automobiles.

In 1925 the company also shaped and welded its dealer network in France; the number of dealers increased from 200 in 1919 to 5,000 in 1925. The fame of Citroen continued to spread as Haardt and Audouin Dubreuil led their second mission, the Croisiere Noire, between October 1924 and July 1925. The Citroen Central African Expedition consisted of sixteen men and eight half-trucks traveling a total of 20,000 kilometers from Colomb-Bechar (Algeria) to Antananarivo (Madagascar).

From 1925 until 1934, the name “Citroen” was in lights, in letters 30 meters high, on the Eiffel Tower; Charles Lindbergh said he used the illuminated tower as a beacon for his solo flight across the Atlantic in 1927. Andre Citroen organized a reception for Lindbergh at the Javel factory, where 6,000 workers were present to greet him.

By 1928 Citroen’s factories employed 30,000 workers and maintained a total production capacity of 1,000 vehicles per day; the company had 14 distributors in France and North Africa, ten subsidiary companies, and four factories in foreign countries. Overseas sales represented 45 percent of all French motor industry exports.

After the crash of the New York Stock Exchange in 1929, Citroen, along with the rest of the world, entered an era of economic crisis. The company’s yearly production fell in 1932 to 41,348 vehicles. Milestones in the 1930s, nevertheless, included Citroen’s first bus, a 22-passenger vehicle with all-steel bodywork and a six-cylinder engine, built at the Levallois factory in 1931. In 1932 the company announced the C4G and C6G, containing the first engines carried on soft mountings to eliminate vibration; a swan in flight between the double chevrons of the Citroen badge symbolized the advance. Also in the 1930s, Haardt and Audouin Dubreuil completed their third expedition: the Croisiere Jaune. Forty men and 14 half-trucks traveled 12,000 kilometers from Beirut to Peking via the Himalayas, the Gobi desert, and China from April 1931 to February 1932.

Even as the Depression continued to dampen the high spirits of the French motor industry, Andre Citroen clung to his original thinking: the greater the number of products, the cheaper production becomes. In 1933 he set two goals: production of 1,000 vehicles per day, and the introduction of the new front-driven model developed by Citroen designer Andre Lefebvre. The company announced the 7A in April of 1934, the first of a line of Traction Avant models that were produced until 1957. The model had bold specifications: aerodynamic bodywork, unitary steel body with no chassis or running-boards, all-independent suspension, and hydraulic brakes.

M. Citroen’s plans came to a standstill, however, when the company’s financial difficulties led to an inability to pay its debts. In 1934 the French government asked the Michelin company, Citroen’s principal creditor, to take financial control and re-float the company. Under the direction of Michelin, 8,000 layoffs took place. The company’s production plummeted from 51,546 in 1934 to 29,101 in 1935.

In 1935 Andre Citroen died after a serious illness. The following year the company conceived one of its all-time classics, the legendary 2CV (or “deux chevaux”). The idea was for a low-priced car with a very small engine, described by the design department as “four wheels under an umbrella.” In 1939 the declaration of war prevented the company from announcing the 2CV. In May of that year, the company destroyed all of its 250 prototypes except one to maintain secrecy. In 1940 the Quai de Javel factory was bombed and Citroen’s Belgian factory was partly destroyed. The company’s production gradually fell to zero in 1943, partly due to management’s refusal to comply with the demands of the Vichy government.

Production built up slowly from 1,600 in 1945 to 12,600 in 1946. In 1948 the 2CV appeared at the Paris Motor Show. From October 1949 to the end of 1984, the company built over 3 million examples of the immensely popular vehicle. With an outer appearance that Steven Greenhouse of the New York Times called a cross between a camel and a frog, the 2CV was long the least expensive French car on the market. A cult developed around what became something of a national symbol for the car of the proletariat. Manifestations of popular enthusiasm for the 2CV included odes, sculptures, and water races (contestants removed the car’s tires and floated it on oil drums). As the company entered the fifties, the demand for the 2CV stretched the delivery delay to six years.

In 1953 Citroen began decentralizing its production organization with the opening of the Rennes-la Barre Thomas factory in Brittany. It was not until the end of the 1970s, however, that the company achieved a balance between the Paris region and the provinces.

Citroen’s design and development department pioneered a technical breakthrough in 1954: constant-height hydropneumatic rear suspension. The system combined the actions of a gas and a liquid to achieve greatly improved road handling. In 1955 the company announced the DS19, with no front grille and a completely smooth nose. This model was revolutionary not only because of its aerodynamic shape, but also because of its technical features, including the newly developed hydropneumatic suspension. All major systems (gearchange, clutch, steering, and brakes) were power operated. The model was an instant success: Citroen received 12,000 orders by the end of the first day.

In 1958 the factory of the Societe Citroen Hispania at Vigo (Spain) began to produce 2CV vans for the Spanish market and for export. This gave the company representation in a market where imports were strictly limited by quotas. Also in 1958, the company announced the four-wheel-drive 2CV Sahara, especially useful for oil exploration and mining teams in desert areas; the vehicle was capable of climbing a sandy, 40 percent slope fully laden. In 1959 a Citroen ID 19 driven by Coltelloni, Alexandre, and Desrosiers won the Monte Carlo Rally; this led the company to its decision to participate in motor sports events in the years to come.

As Citroen entered the 1960s, the company expanded by establishing subsidiaries and signing joint ventures in foreign locations. In 1960, it reached an agreement with the Yugoslav Tomos concern for the assembly of the 2CV in Yugoslavia. In 1962 Citroen established sales companies in Montreal and Vienna. In 1963 the company set up a subsidiary in Chile for assembly and sales; it also reached an agreement with the Sedica company for the assembly of the 2CV and 3CV in Madagascar. In 1964 the Mangualde factory in Portugal came into operation to manufacture the 2CV; this move again allowed Citroen access to a market with severe restrictions on the import of fully assembled cars.

New models in the 1960s included the Ami 6, a model categorized as top-of-the-range, and the Dyane, a model categorized between the 2CV and Ami 6.

In 1965 Citroen acquired the Panhard factory at Reims (France), a facility specializing in the manufacture of mechanical components for commercial vehicles. In 1967 after signing an industrial collaboration agreement for the production of common designs, Citroen took a majority shareholding in the company Berliet, the European Economic Community’s largest producer of commercial vehicles.

Citroen underwent major reorganization the following year. A holding company was created (Citroen SA) to oversee the activities of Citroen, Berliet, and Panhard. Citroen SA gathered within its structure more than 20 subsidiary companies, including the Societe Anonyme Automobiles Citroen (handling production) and the Societe Commerciale Citroen (handling sales).

Citroen signed a technical and commercial agreement in 1968 with the Italian sports car company Maserati. It also signed an agreement with Fiat to set up a holding company, Pardevi, which would hold the majority of Citroen shares, and in which Fiat would have a 49 percent shareholding, and Michelin 51 percent. Under the terms of the agreement, Autobianchi models were to be sold through Citroen dealerships in France, Belgium, Switzerland, and Portugal; Citroens were to be sold through the Autobianchi dealerships in Italy.

In 1970 the company organized the Paris-Kabul-Paris “raid” with 1,300 participants in 2CVs, Dyanes, and Meharis. In March of that year, the company launched the SM, a luxury coupe made possible by the 1968 agreement with Maserati.

In 1971 the company reached agreements with Inda SA of Paraguay, Quinatar SA of Uruguay, and Aviles Alfaro in Equa-dor for the assembly of 2CV and 3CV models. In 1972 it signed an agreement with the Yugoslav concerns Tomos and Iskra for the creation of a joint Franco-Yugoslav company, Cimos, to manufacture the 2CV, Dyane, Ami 8, GS and mechanical components in Yugoslavia. The company also created an industrial and commercial subsidiary in Johannesburg, and reached agreement with a company in Tunisia for the assembly of 2CV and 3CV models.

In 1973 the decision of Middle East oil exporters to increase oil prices dramatically led to a severe international economic crisis. Production at the company fell in 1974. Citroen staged a recovery in 1975, largely due to an increase in exports, which represented 55 percent of the total sales volume.

In 1973 the company opened the Aulnay-sous-Bois factory in the Paris region, intended to gradually replace the original Quai de Javel factory. The new facility was one of the most modern of its day; it had body assembly transfer lines, an automated paint system, and computer-controlled buffer stores and production systems. In the same year, Fiat withdrew from Pardevi and returned its 49 percent shareholding to Michelin.

In 1974 Michelin and the Peugeot group decided to merge Automobiles Citroen and Automobiles Peugeot in order to create a truly internationally competitive company. The two groups retained their own sales networks and product ranges; they agreed upon joint research policies as well as joint purchasing and investment in order to achieve economies of scale. In the same year, Berliet left the Citroen group, and the famous factory at Quai de Javel closed its doors.

In the mid-seventies, Citroen opened a completely computer-controlled factory, the Charleville-Meziere foundry in Ardennes (France). Affected adversely by the energy crisis, the company ended production of its luxury SM model. It announced a new model, the CX2200, which in 1975 won the awards of “Car of the Year,” “Prix de la Securite,” and “Award Style Auto.” In 1976 as part of the merging process, the Peugeot group took an 89.95 percent shareholding in Citroen and created the PSA holding company.

In 1978 a sister company of Citroen and Peugeot, the SMAE or Societe Mecanique Automobile de l’Est, was founded at Metz (Lorraine); the company’s two factories supplied mechanical assemblies to both PSA companies. Also in 1978, the company announced the FAF, or Facile a Fabriquer (“easy to manufacture”) at the Dakar fair in Senegal. Developed with the needs of the “Third World” in mind, the model had a body built up from a folded steel sheet which could be made without heavy machinery. Citroen signed assembly agreements with several African countries, including Senegal, the Ivory Coast, Guinea-Bissau, and the Central African Republic.

Modern management theories had their impact on Citroen as the company’s first Quality Circles appeared in 1980. Five to ten volunteers in each circle worked to apply quality control techniques to solve problems as they arose. Another sister company, the SMAN (Societe Mecanique Automobile du Nord) began operations at Valenciennes in northern France in 1980; it supplied the three companies of the group with gearboxes for mid-range vehicles. Citroen felt the effects of the second energy crisis as production fell in 1980; losses in 1982 and 1983 were the equivalent of $142 million.

The early 1980s threw yet another roadblock in the company’s way when workers went on strike in several factories in the Paris area; the strikes prevented production for several weeks. On the foreign front, however, the company covered yet more new territory by signing its first contract with China. With the sale of 150 CXs to the Dong Fang Hotel in Canton, Citroen made its entry in the Chinese market.

In 1983 the company began operations in the Meudon factory that were completely controlled by computer, worked 24 hours a day, and needed no manual intervention to check prototype and small- and medium-series components. In the same year, Citroen entered the European market for top-class long-distance cruisers with the announcement of the CX 25 RD Turbo and CX 25 TRD Turbo saloon and estate.

The company shifted its image in the mid-1980s by inaugurating a new corporate identity campaign featuring a herd of thoroughbred horses running wild. It also replaced the old dealer network colors of blue and yellow with red and white. In July 1985 Citroen participated in the first Chinese motor show in Shanghai and signed a contract for the delivery of 250 CXs. In 1986 the company again became profitable after six years of financial losses.

The company continued on the quality control route by introducing the Plan Mercure program in its production facilities in 1986. The plan introduced product diversification, cost-cutting schemes, shorter delivery schedules, shorter chains of command, and value-added job profiles. The company also prepared to launch its new AX by adopting a single publicity strategy—identification of the model with China and the Great Wall.

Citroen’s strategies began to pay off handsomely in the last half of the decade. End-of-the-year 1987 figures showed a tripling of 1986 profits; in 1988, profits were 78.24% higher than in 1987, and the PSA Group’s profits reached FF 8.8 billion. Citroen exports increased by 12 percent, with the most significant gains in Portugal, Spain, and Britain.

Citroen began major preparations in 1988 to introduce its new luxury model XM. Investments reached FF 7.5 billion, including FF 1.2 billion in research and development. The company completely refurbished the final assembly plant for the model at Rennes-La Janais. Citroen displayed the XM at the Frankfurt Motor Show, using an avant-garde stand with a centerpiece representing movement into the future.

As Citroen entered the 1990s, it set up a joint Citroen-Mazda distribution network in Japan, known as Eunos. It also established a network of 80 Citroen dealers in eastern Germany, and associated with Peugeot in a coordinated logistics program for spare parts over the whole of Europe. The company signed a joint-venture contract with the Chinese manufacturer S.A.W. (Second Automobile Works), creating a company to manufacture and market the Citroen ZX.

The company officially returned to international motor competition with the announcement of the Citroen ZX Rallye-Raid. Winning drivers for Citroen included Ari Vatanen and Bruno Berglund in the eighth Baja Aragon Multi-Terrain race, and Christine Driano in the 1990 French Rally Championships. The company came out ahead not only in sports: the Citroen XM won 14 national and international awards and was voted “Car of the Year 1990.” Also in 1990, Citroen launched a “customized” series with models designed to fit customer lifestyles, such as “image,” “relaxation,” “sport.” One lifestyle philosophy, however, disappeared altogether: The last 2CV rolled off the production line and rode into history on July 27, 1990.

In 1991 European markets important to Citroen contracted as the European car industry entered a recession. Citroen officially introduced the ZX to the general public at the Geneva motor show, targeted for the mid-range market as a collection of four models. The company also signed an agreement with trade unions that addressed job classification, training, easier access to supervisory grades, and the creation of clear promotional paths to executive status. Finally, an international jury of 100 journalists in association with the Auto-Moto magazine voted Citroen car-maker of the century. While the manufacturer may face economic obstacles in the last leg of the road to the twenty-first century, its innovative character should keep it driving forward well beyond.

Principal Subsidiaries

Societe Mecanique Automobile de l’Est (75%); Societe de Construction d’Equipements, de Mecanisation et de Machines (SCEMM); Societe Commerciale Citroen; Citroen Deutschland AG (Germany); Citroen Commerce AG (Germany); Citroen Hispania S.A. (Spain; 93%); Citroen Italia SpA (Italy; 96%); Comercial Citroen S.A. (Spain); Citroen (U.K.) Ltd. (United Kingdom).