PSA’s Road to Recovery Takes Turn Through Spain

MADRID – PSA Peugeot Citroen is one of the healthier automakers in the still-struggling European market, where it sold 1.64 million vehicles in 2014, up 8.1% from prior-year. Global volume rose 4.3% to 2.9 million units.

Peugeot was the most popular brand in Europe last year, when sales climbed 8.1% to 952,000 units. Citroen deliveries grew 7.2% to 689,000. The Citroen total includes 85,900 units of the newly launched DS brand of premium vehicles.

Within the European result, PSA sold 152,992 units in 2014 in Spain, including 79,724 Peugeot-brand deliveries and 73,268 Citroen and DS models.

Spain is PSA’s fourth-largest global market behind China (734,119), France (637,682) and the U.K. (255,036), according to Rafael Prieto, who earlier this month became general manager for the PSA brands in Spain and Portugal.

Prieto does not offer details of the PSA brands’ financial performance in 2014 in Spain, but says Peugeot dealers’ average profit was 1% and was about 0.5% for Citroen retailers. Inventories have been reduced beyond PSA’s initial targets.

Dealers five years ago needed to sell an average 500 vehicles to be turn a profit, Prieto says, but since PSA’s extensive reorganization following the worldwide financial crisis the minimum to achieve profitability has been reduced to 250 vehicles.

While Peugeot and Citroen dealer networks in Spain have the capacity to face a sales increase, Prieto says, the DS dealer network needs to be expanded and the first DS Stores are to open this year. He says the DS brand initially will own the stores, but he has received private offers to invest in and build them.