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By Gilles Guillaume and Sarah White
PARIS (Reuters) – The Peugeot PSA Group made a profit in the first part of the year, even as the COVID-19 pandemic hit revenue, and said a sharp uptick in sales in June in its main European markets lasted until July.
The French automaker, which suffered as its rivals when they closed concessions and halted production as the epidemic spread from China to Europe and the United States, also said Tuesday that it achieved its medium-term profit margin target.
“June a very strong uptick in sales and July is experiencing a similar trend,” CHIEF financial officer Philippe de Rovira told the press.
The CEO, Carlos Tavares, added that the order books were “excellent” at the end of the first half, driven through a cumulative call for new versions of his Peugeot 208 and Opel’s Corsa style after the coronavirus locks relaxed.
PSA shares increased by more than 4% at the start of the session.
Tuesday’s knowledge showed an increase in export expectations for German automakers, adding to the symptoms of a strong recovery in the sector. However, Japan’s troubled automaker Nissan expects a record annual operating loss.
PSA is running in a merger agreement with Fiat Chrysler Automobiles (FCA) of Italy, which will open it more to markets such as the United States.
The French organization reiterated an average margin target of more than 4.5% in its automotive unit for 2019-2021, although they were reduced to 3.7% in the first half compared to 8.5% at the end of 2019.
PSA’s profitability has overshadowed that of some competitors, adding that France’s Renault, in recent quarters, helped through more expensive models such as SUVs.
Under Tavares, PSA’s limited production prices and executives said Tuesday that the operating equilibrium point, which had reached 53%, the company could still generate money with some of its same volume of old cars, would even decline by 2020.
The group’s net profit in the first part of 2020 also remained in positive territory, at 595 million euros ($697 million), at 1.83 billion euros a year ago.
Turnover, meanwhile, fell 34.5% to 25.12 million euros.
PSA said it was experimenting with more online sales, adding its own workers across Europe, and hoped this would become a developing component of its business.
STELLANTIS ON THE TRACK
Tavares told analysts that the merger with FCA, which will create the world’s fourth-largest automaker under the so-called “Stellantis,” will still be completed in the first quarter of 2021.
Earlier this month, EU antitrust regulators suspended their investigation into the proposed merger pending data.
When asked about the concessions imaginable to conclude the agreement, Tavares said that if anything were done it would be, adding that PSA would not be “fussy” and that it was keeping an open brain in its discussions with the European Commission.
In particular, the festival government tested the combined market percentage of FCA and PSA in vans.
(Reporting through Sarah White and Gilles Guillaume; Editing through Kim Coghill and Mark Potter)