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Peugeot says sales edge ahead in long haul out of crisis
[PARIS] Peugeot Citroen said on Wednesday strong quarterly sales in China and by its car-parts subsidiary has kept its drive away from crisis on track, despite an overall lacklustre performance.
Europe's second-largest carmaker is pinning much of its recovery strategy on a tie-up agreed this year with Chinese group Dongfeng and on another Chinese venture.
Peugeot's third-quarter sales in China, the biggest auto market in the world, leapt by 44.4 per cent. Its market share widened by 0.7 percentage points to 4.4 per cent.
The biggest underlying factor behind the group's global revenue was growth in its auto-parts subsidiary Faurecia.
Total group sales in terms of vehicle volume rose by 5.4 per cent, but sales in some markets plunged.
Group turnover edged up just 1.6 per cent to 12.29 billion euros (US$15.6 billion), but that still beat the consensus of 12.05 billion according to Societe Generale analysts.
Shares in the PSA Peugeot Citroen group ended the day with a gain of 1.09 per cent to 9.47 euros after a rollercoaster day that saw them initially rise 2.5 per cent and then slip into loss twice.
Chief executive Carlos Tavares said the recovery plan was beginning to produce results but that "the road back to a full recovery is still long".
The group held to its main targets under his turnaround plan called "Back in the Race," designed to revive its fortunes after two years of severe financial difficulties.
Sales by Peugeot Citroen in the European market, slowly recovering after five years of downturn, rose 7.0 percent.
According to data by the European Automobile Manufacturers Association released last week, however, Peugeot Citroen is trailing the overall 6.1 percent gain in nine-month European sales with an increase of 4.8 percent.
PSA, ranking second in Europe after the giant German VW group, is trying to accelerate expansion into emerging markets in a bid to diversify beyond the bleak European car market.
PSA said that it expected the European market to grow this year by 4.0-5.0 per cent, and the Chinese market by about 1.0 per cent.
But in the region which PSA group describes as Eurasia, sales plunged by 62.4 percent against the backdrop of the crisis in Ukraine and sanctions against Russia.
Sales in South America fell by 38.2 per cent owing to difficult economic conditions in Argentina and Brazil, while in the Middle East and Africa, they fell by 11.3 per cent.
The group said that on these markets it would it was working to rationalise its fixed costs and to adjust the range of vehicles on offer with the aim of breaking even in financial terms in 2017.
The figures from Faurecia showed the importance of this parts division. Its sales grew by 6.5 per cent to 4.36 billion euros.
France is home to two major car-part makers in global terms. The other big French auto parts maker Valeo reported a 10.0-per cent jump in quarterly sales and its shares rose 1.09 per cent to 85.97 euros.
Meanwhile sales by the PSA auto-making division fell by 0.8 per cent to 7.97 billion euros, although this was better than the consensus forecast of 7.85 billion.
In Latin America, it expected the market to shrink by about 10.0 per cent and in Russia by about 15.0 per cent.