PSA will move out of Paris headquarters

PSA/Peugeot-Citroen will move out of its Paris headquarters in 2017 to a location in the city’s western suburbs as part of a cost-saving push under its new part-Chinese ownership structure.

PSA France director Xavier Duchemin revealed the decision today on the sidelines of a New Year press conference at the building on the prestigious Avenue de la Grande Armee, near the Arc de Triomphe monument.

PSA’s 19th-century origins are in eastern France. It moved into the white, rectangular block facing onto one of the capital’s busiest roads in its 1960s heyday as it enjoyed international success with its 404 model.

The family-run group went on to buy rival Citroen in 1976 and the European activities of U.S.-based Chrysler two years later.

Problems digesting the Chrysler acquisition and fearsome competition in the sector saw a business that made its first motor vehicle in 1889 lose traction over the next decades.

It sold the building in 2012 for  €245.5 million ($291 million) to raise cash as the international auto industry crisis tipped it into a loss. PSA has held a renewable lease on the building since. With Citroen’s headquarters in northern Paris also set to close, some 2,200 people will move to two locations west of Paris.

PSA sold 14 percent of the company apiece to Chinese carmaker Dongfeng Motor and the French state last year in a  €3 billion rescue share issue after racking up losses of 7.3 billion in two years. The Peugeot family still holds a matching 14 percent stake.