Sluggish Europe, Iran Boycott Put Lid on PSA Global Sales in 2012

PARIS – PSA Peugeot Citroen global sales fell 16.5% in 2012 to 2,965,000 units.

The European economic crisis hit hardest in PSA’s best markets of France, Italy and Spain, and complete-knocked-down sales fell 71% to 145,000 units in 2012, stopped cold in February when an international boycott of Iran began.

Without counting CKDs, sales were down 8.8% globally.

The collapse in European demand had the effect of boosting PSA’s non-Europe percentage from 33% of volume a year earlier to 38% in 2012, and Frederick Saint-Geours, the executive vice president for brands, says the auto maker is well on the way to reaching its goal of 50% of sales outside Europe.

This year is likely to push the percentage up again, as PSA anticipates a European-market decline of 3%-5% in 2013, after an 8.6% drop last year.

“PSA Peugeot Citroen has felt the full force of the sustainable decline in Europe's automobile markets,” Saint-Geours says. “2013 will be another difficult year in Europe, but we have innovative and attractive vehicles there.

“The Group will build on the success of the DS line, the Peugeot 208, our HYbrid4 vehicles and Europe's lowest carbon emissions lineup. We will also be lifted by new launches in 2013, with the largest number of new Peugeot and Citroen models ever coming to market in a single year.”

Last year, sales tumbled 13.3% in France, 14.9% in Spain, 20.9% in Italy and 40% in Portugal. Those countries account for 57% of PSA’s volume. PSA’s share of the European market slipped from 13.3% in 2011 to 12.7%.

PSA does have several bright spots it can point to. Its sales in China grew 9.2%, outpacing the 7.2% gain in the market overall and increasing the auto maker’s share to 3.5%. This year, the group will introduce the Peugeot 3008 and Citroen C4 L in early 2013, followed by the Citroen C-Elysee and Peugeot 301. In the second half, it begins production of the DS5 in a factory in Shenzhen.

PSA sales declined 8.3% in Latin America, a market up 5.6% overall. But the auto maker says its performance can be blamed in part on lower production in Brazil as its Porto Real factory was being expanded and a change in tax policy that drove Brazilian demand toward B-segment cars, where PSA has no entry.

This year, the auto maker will introduce the Citroen C3 and Peugeot 208 in the Mercosur trade region, filling that gap.

The Russian market grew 10.1% in 2012, and PSA sales rose 7.4%, for a small loss of market share. During the year, PSA launched the Peugeot 408, 508 and 4008 and the Citroen C4 Aircross, DS4 and DS5. Sales of the auto maker’s light-commercial vans outpaced the 3.9% segment growth with an 18% increase in registrations.

The strategy of moving its sales up-market also is paying off. Some 20% of the Peugeot brand volume is now high-end vehicles such as the 3008 cross/utility and 508. At Citroen, 10% of global volume is the DS line, while in Europe the DS accounts for 18% of sales.

PSA says it delivered 22,000 diesel hybrids during the year, giving it the No.2 rank behind Toyota for hybrids. Roughly 25% of Citroen DS5 models sold were Hybrid4 versions, with hybrids accounting for 20% of Peugeot 508 volume and 17% of Peugeot 3008 deliveries.

PSA says it will launch nine vehicles in Europe this year, including four upscale models, the Citroen DS3 Cabrio and Peugeot 208 GTI, 208 XY and 2008.