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The French automotive Group, which also owns car seating and parts manufacturer Faurecia, has posted solid margins for the first half of 2019 thanks to stable demand in Europe, its core market.
Groupe PSA’s revenue amounted to €38,340 million in the first half of 2019, down 0.7% against the corresponding period of 2018. Automotive division revenue totalled €30,378 million, down 1.1% year-on-year, mainly driven by product mix (+2.9%) and price (+1.3%), which are said to have partially offset the decrease of sales to partners (-2.2%), the negative impact of exchange rates (-0.8%), volumes and country mix (-1.4%). The Group’s recurring operating income amounted to €3,338 million, a 10.6% increase, with Automotive recurring operating income up 12.6% at €2,657 million. According to PSA, this 8.7% strong profitability level was reached thanks to a positive product mix and further cost reductions, despite exchange rate headwinds.
Despite the Group’s car sales declining 12.7% in the first half to 1.9 million units, highly affected by lower demand in China and the Iranian embargo, PSA’s consolidated net income totalled €2,048 million in the period, representing an increase of €335 million against H1 2018. Net income, Group share, reached €1,832 million, up €351 million. As a slowdown is observed in the global car market, with lower demand in China impacting most automotive manufacturers, Groupe PSA’s strength in Europe is said to have largely contributed to its solid results; 88% of the Group’s sales in the first half of 2019 were carried out in Europe. Its four brands are said to have performed well; Peugeot, Citroen, Opel/Vauxhall and DS, particularly in the SUV segment.
The Group’s car sales dropped sharply in China-Southeast Asia (-60.62%) and in Africa-Middle East (-68.35%) but increased slightly in India-Pacific (+2.27%) and remained stable in Europe (+ 0.27%), where overall automotive sales declined 2.4% in the first six months of the year. As for the Faurecia division, sales totalled €8,972 million in the first half of 2019, down 0.2% compared with the same period in the prior year, highly impacted by the slowdown in China. Read more here.
In its 2019 outlook, the Group anticipates a 1% decrease of the automotive market in Europe, -4% in Latin America and -7% in China, but a 3% growth in Russia.