PSA Group Positive Numbers in H1 Backed by Iran Sales

EghtesadOnline: PSA Group has released sales data for the first-half of 2017 indicating that Iran helped it increase overall sales despite downturn in revenue elsewhere.

News ID: ۷۷۷۶۸۴

16 July 2017

The decline in Europe and China aside, PSA Group's deals with Iran Khodro and SAIPA have helped it move into positive territory with models like the Peugeot 207i and pre-sales of Peugeot 2008.

Iran continues to play a major role pushing PSA sales up with 207,900 vehicles sold in the country in H1 indicating a 2.3% growth y/y, a press release by the firm said this week.

Resumption of official sales in Iran has helped PSA more than triple its Middle East and Africa deliveries to  277,971 vehicles. Iran now accounts for 74.7% of sales in the MENA region, according to Financial Tribune.

Moreover, the figures indicate Iran was responsible for  13.1% of PSA Group's total sales in the first half of the year. According to earlier reports, first-quarter sales in Iran contributed to one seventh (14.2%) of all PSA Group's profits.

The French automaker sold 1.58 million vehicles worldwide between January and June, compared to just over 1.54 million in the same half of 2016. The Peugeot brand recorded a 15% increase in sales, while Citroen declined by 12% and luxury sub-brand DS was down 46%. Overall the sales of the firm were down 11%, MENA sales not included.

China Sales Hurt

China remains a weak spot for the firm, with sales in the country of 1.4 billion people dropping 49% to just 152,380 vehicles and the Citroen brand down 63% during the same period.

In Europe, PSA's home region, sales have also dropped by 1.9% to 1.04 million vehicles, essentially weighed down by a sharp decline for the upscale DS brand, which slumped 45%.

Iran Projects

Iranian car registrations reached 1.6 million vehicles at their 2011 peak, with PSA claiming almost 30% of the market, before collapsing under the weight of the international sanctions imposed on Iran due to the nuclear dispute.

Now it seems the company is trying to rebuild its overall dominant position with the help of the two planned joint ventures.

The new projects include IKAP, which recently started local production of the Peugeot 2008.

PSA's Citroen also reached an agreement with SAIPA, Iran's second biggest automaker, in 2016 on framework deal to produce and sell vehicles.

Based on the deal, the Paris-based carmaker will  invest €300 million ($330 million) over five years for the development and production of three Citroen models, planned to be sold throughout the country via an exclusive deal.