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Customer LoginsGroupe PSA's global sales growth in November driven by Middle East-Africa region again
Groupe PSA's global sales have risen 8.9% y/y during November, driven by the Middle East-Africa region.
- Significance: Groupe PSA's global sales have risen 8.9% y/y during November, which has helped its YTD growth move further into positive territory.
- Implications: Its global sales have been driven by the unique situation in its Middle East-Africa region after officially returning to Iran in the middle of the year.
- Outlook: In the near term, excluding the benefit of its Iranian JV, IHS Automotive currently anticipates that PSA's light-vehicle global registrations will stand at around 2.83 million units during 2016, a decline of around 3.2% y/y. However, it will start to recover during 2017.
Groupe PSA's global sales have risen during November. According to the latest data published by the automaker, its total consolidated light-vehicle sales have grown by 8.9% year on year (y/y) to 297,300 units. This has helped to further lift its year to date (YTD) sales which now stand at 2,797,000 units, an increase of 4.2% y/y.
On a brand basis, the gain this month has been driven by the Peugeot brand, which leapt 21.0% y/y to 190,600 units. However, the situation has been much less positive with its other brands; Citroën fell 5.9% y/y to 100,500 units, while the premium-orientated DS Automobiles brand has slid by 28.5% y/y to 6,200 units.
Despite the improvement in sales, it has been a mixed month on a regional basis. However, its largest market, Europe - which comprises the European Union (EU), European Free Trade Area (EFTA), Albania, Bosnia and Herzegovina, Croatia, Kosovo, the Former Yugoslav Republic (FYR) Macedonia, Montenegro, and Serbia - made a modest contribution to this increase, up by 1.4% y/y to 165,800 units. Its Peugeot and Citroën brands contributed with gains of 1.4% y/y to 94,500 units and 5.4% y/y to 66,700 units, respectively. However, the DS Automobiles brand recorded a decline of around one-third to 4,600 units.
In its Latin American region, its sales have also increased by 2.6% y/y to 17,400 units as a result of an exceptionally mixed month for its brands. While the Peugeot brand gained by 12.1% y/y to 12,100 units this was offset by Citroën contracting by 13.4% y/y to 5,300 units.
An even bigger uplift has come from its Middle East-Africa region. Sales here have improved by 223.0% y/y to 52,600 units, as the Peugeot brand has increased 336.4% y/y to 45,200 units. However, the automaker added that its sales also include around 36,000 Peugeots sold under licence by its partner Iran Khodro Corporation (IKCO) during the month. Its other brands have also made important contributions, with Citroën gaining by 24.9% y/y to 7,300 units.
Without the strong performance in Middle East-Africa, it would have been unable to offset its weak performance in its other regions. The most pronounced of these has been in China-South East Asia where its sales have fallen by 18.9% y/y to 58,900 units. Its Peugeot brand slid by 7.8% y/y to 37,300 units as DS Automobiles fell by 13.5% y/y to 1,200 units. However, the worst performance has been recorded by Citroën which slumped by 33.8% y/y to 20,400 units.
Further declines in the Eurasia and India-Pacific markets added to the pressure on the French OEM. In the former, sales have declined by 21.5% y/y to around 900 units, with little respite offered by any of its brands. In India-Pacific, its sales have tumbled by 32.8% y/y to 1,700 units as a strong improvement in Citroën sales was wiped out by far weaker Peugeot sales.
Outlook and implications
The situation recorded on a regional basis this monthly is broadly representative of what has been happening in its key markets throughout the course of the past 11 months.
PSA will be massively disappointed with its performance in China-Southeast Asia region during 2016. The majority of its sales here are focused on the vast Chinese passenger vehicle market. However, while the wider market has risen 14.1% y/y during the first 11 months, PSA has tumbled by 18.2% y/y. What will be doubling the frustrations for the automaker is that this has been largely stimulated by a 50% cut in the new-car purchase tax for vehicles fitted with engines of 1.6 litres and smaller to just 5%, a category in which PSA should be strong. It now remains to be seen when its restructuring plans will start to bear fruit under the management of Denis Martin, who was a key figure in the automaker's reversal of fortunes in Europe. Furthermore, PSA has been hoping to revive customer interest by launching models that are more appealing to local customers such as crossovers and sport utility vehicles (SUVs), supported by a new plant. However, the initial benefits may not necessarily be seen through its sales volumes as PSA's chief executive officer (CEO) Carlos Tavares is heavily focused on the operating margins of the unit.
In Europe, the YTD rise has been relatively modest compared to the strong gains recorded by the passenger car and light commercial vehicle (LCV) markets in the EU, where the lion's share of its sales happen here. However, it has not undertaken the levels of new model activity that some automakers have, only launching the Peugeot Expert and Citroën Jumpy LCVs and their passenger derivatives that will have made much of a difference in the full year. Towards the end of the year though, new models like the second-generation Peugeot 3008 and third-generation Citroën C3 have started to reach customers. This will be joined by the next Peugeot 5008 at the beginning of 2017, which will shift into the crossover segment. This new model activity will increase again towards the second half of 2017 when all its brands will start to show new models, including DS Automobiles will reveal a crossover which is expected to be provide a lift to its current line-up.
For now though, the growth is being underpinned by impressive gains in the Middle East-Africa market. However, the main reason for this is changes to the way that PSA is accounting for Peugeot-licensed vehicles produced and sold by IKCO, with which it renewed its JV relationship during June this year. This situation is heavily inflating PSA's corporate sales figures, and without the 189,000 units of IKCO sales since the deal its global performance would have been very much on of decline. Nevertheless, the automaker is committing itself heavily to the market, having not only signed up with IKCO to support the Peugeot brand, but also one with Saipa to drive growth of the Citroën brand. However, the wider region is also important to the automaker's strategy, with the establishment of facilities and production joint ventures (JVs) in Africa, although it remains very conscious that the business case needs to stack up.
In the near term, excluding the benefit of its Iranian JV, IHS Automotive currently anticipates that PSA's light-vehicle global registrations will stand at around 2.83 million units during 2016, a decline of around 3.2% y/y. However, it will start to recover during 2017 before reaching around 3.28 million units by the end of the decade.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.