Peugeot Citroen lifts profits despite falling sales

An Iranian couple passing by a French Peugeot 307. (AFP pic)

PARIS: French auto giant PSA, maker of Peugeot and Citroen, on Wednesday reported a jump in profits in the first six months of the year, despite falling unit sales and revenues.

PSA, which also owns the DS, Opel and Vauxhall brands, said in a statement that its bottom-line net profit rose by 23.7% to €1.8 billion (US$2.0 billion) in the period from January to June.

By contrast, revenues slipped by 0.7% to €38.3 billion in the six-month period.

And, as reported earlier this month, unit sales were down 12.8% at 1.9 million vehicles between January and June.

“The market has become more difficult in the first half, but that didn’t prevent us from turning in solid results,” finance chief Philippe de Rovira told a telephone news conference.

“We overcame various headwinds thanks to our efficiency and the remarkable success of our new products.”

Much of the drop in first-half sales was attributable to the halt in sales in Iran as a result of US economic sanctions against the Islamic republic.

But because the revenues from those sales are not included in the profit-and-loss accounts, they had “no financial impact”, de Rovira said.

Another factor was a sharp drop in sales in China, where the PSA group booked a loss of around €300 million, the finance chief said.

The French carmaker is considering downsizing its production in China.