PSA Peugeot Citroen has posted third quarter group revenue of EUR12.4bn, up 3.2% year-on-year. However, it also posted overall vehicle sales down 4.6%.
The positive revenue figure suggests a favourable volume and family mix as the company said that new car car revenue increased by 2.6%, driven by a 1.2% increase in net pricing.
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However, some analysts expressed concern that the company experienced a sales decline in the quarter and is exposed to generally negative market sentiment on diesels in the wake of the Volkswagen diesel emissions scandal.
PSA said sales volume fell by 4.3% overall in the third quarter of 2015, but rose by 0.8% excluding China.
In Europe, sales growth was put at 6.1% in the third quarter (versus 2.9% in the first half, so there has been some acceleration), driven by increased market demand. The company said it had “pursued its strategy to improve price positioning for the Peugeot, Citroën and DS brands”.
In Asia, following the slowdown in the Chinese market, the group “adjusted its inventory in the third quarter”. Sales fell by 17%, while deliveries decreased by a slight 3%.
In Latin America and Eurasia, PSA said it is pursuing measures to “rightsize fixed costs in order to reach breakeven by 2017”. Sales declined by 23% and 45% over the period, in markets that were also significantly down, by 13% and 27% respectively.
In Middle East and Africa and India-Pacific regions, sales decrease by 7% and 24%, but the group's year-to-date sales in these regions were still up by 14% and 15% respectively, it said.
Total inventory (excluding China but including independent dealers) at end-September 2015, stood at 382,000 vehicles, 11,000 fewer than at end-September 2014.
PSA said it's strategy for turnaround remains on track. Jean Baptiste de Chatillon, PSA Peugeot Citroën's Chief Financial Officer, said: "The whole group is committed to the full execution of the "Back in the Race" plan, and the result of that commitment, despite a more difficult economic environment in the third quarter, is a real achievement that gives us confidence about reaching our targets."
Market outlook mixed
In 2015, PSA said it expects automotive demand to expand by 8% in Europe and approximately 3% in China but to contract by around 15% in Latin America and 35% in Russia.
PSA aims to generate operating free cash flow of EUR2bn over the period 2015-2017. It is also targeting an operating margin of 2% for the Automotive Division in 2018, with the objective of reaching 5% over the period of the next medium-term plan, covering 2019-2023.
