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PSA stands by 'moderate growth' forecast for 05

PSA Peugeot Citroen said today it is standing by its February forecast of moderate sales growth and an operating margin between 4.0% and 4.5% of sales.

Vehicle sales for the first quarter of the year totalled 1,754,200 compared to 1,743,400 in the first half of 2004, an increase of 0.6%. The group called this result ‘resilient’.

Newer models like the Peugeot 407, 1007 and 107 and the Citroen C4 and C1 already account for around a quarter of European sales in the first half.

The consolidated operating margin was €1,181 million (£817m), or 4.1% of sales, versus €1,277 million (£883m) in first-half 2004, while net income was €681 million (£471m), versus €858 million (£593m) in first-half 2004.

Consolidated sales and revenue for first-half 2005 totalled €29,006 million (£20,054m), up 1.6% over the year-earlier period. On a quarterly basis, sales and revenue rose by 0.7% to €13,635 million (£9,426m) in the first three months of the year, but increased 2.4% to €15,371 million (£10,629m) in the second.

Car sales rose 1.8% to €23,375 million (£16,165m) for the period. The car division’s operating margin, however, reduced to €650 million (£4,496m) from €770 million (£533m).

PSA said in a statement: "Sales growth picked up slightly in the second quarter. The new models launched during those three months should now start having a greater impact as well. This will drive even faster growth in sales, which will also be supported at year-end by the introductions of the new 407 Coupe and the Citroen C6 in the executive segment.

"However, lacklustre growth in European economies means that the region’s automobile markets are not likely to see a significant upturn and that the Group’s growth will continue to depend on expanding markets outside Europe.

"Operating margin should continue to be supported by the positive effects that already shaped the first half, but which will be attenuated by the impact on automobile division margins of higher raw materials prices, especially for steel. By year-end, the impact should be at the top end of the €250-300 million range forecast at the beginning of the year."

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