PSA Peugeot Citroen (UG), Europe’s second- biggest carmaker, said first-half deliveries fell 13 percent as demand slumped in European markets.
Sales declined to 1.62 million vehicles from 1.86 million a year earlier, the Paris-based company said today in a statement. Peugeot said it suffered from Europe’s “very weak” economic environment, where demand for cars and light commercial vehicles declined 7.2 percent.
“The first half was very, very bad, and I see no reason why the second half would be any better,” said Erich Hauser, a London-based Credit Suisse (CSGN) analyst who has an underperform recommendation on the shares. “The situation in Europe will only get worse as we go forward.”
Peugeot and the French government today denied comments from Philippe Bonnin, the mayor of Chartre de Bretagne, where Peugeot employs 5,800 people, that the automaker is seeking a loan from the French state. Chief Executive Officer Philippe Varin plans to shed as many as 10,000 French jobs, more than the previously announced 6,000 positions, Christian Lafaye, the head of Peugeot’s second-biggest union FO, said this week.
Peugeot plummeted as much as 7.7 percent to 7.08 euros, the biggest intraday fall since March 1, and was down 6.8 percent at 7.15 euros as of 3:17 p.m. in Paris trading. The stock has plunged 74 percent in a year, valuing the carmaker at 2.53 billion euros.
Varin told unions last week the carmaker will need to raise its 2012 savings target of 1 billion euros ($1.24 billion), according to Franck Don, a CFTC union representative.
The carmaker’s European market share narrowed to 13 percent from 14 percent a year earlier, the manufacturer said today. Peugeot’s deliveries to other regions rose to 39 percent of the company’s total in the first half from 38 percent a year earlier.
Chinese sales grew 7.2 percent to 209,000 vehicles, helped by “strong” demand for the Peugeot 308 and Citroen C4 family cars. In Latin America, Peugeot posted a 21 percent drop as a higher Brazilian sales tax and slowing economy hurt sales.
To contact the reporters on this story: Mathieu Rosemain in Paris at firstname.lastname@example.org; Alex Webb in Frankfurt at email@example.com
To contact the editor responsible for this story: Chad Thomas at firstname.lastname@example.org