PSA Peugeot Citroen (UG), Europe’s second- largest carmaker, delivered 20 percent fewer vehicles in the fourth quarter as a push abroad failed to protect the company from a recession in its home region.
Sales of cars, vans and kits of components ready for assembly fell to about 720,000 vehicles from 902,000 a year earlier, according to data provided by the Paris-based company. Deliveries last year dropped 17 percent to 2.97 million, Paris- based Peugeot said today in a statement.
“The sales figures look as bad as one would expect,” said Sascha Gommel, an analyst at Commerzbank AG with a reduce recommendation on the shares. “The company is suffering heavily in Europe, but also in other regions like Latin America,” and losing market share to competitors such as Volkswagen AG (VOW) and Hyundai Motor Co.
A European car market that’s the smallest in almost two decades has led to cash depletion at Peugeot. The company said yesterday that its banking unit sold 3.1 billion euros ($4 billion) in asset-backed securities in 2012 to bolster finances. The manufacturer entered a model-development alliance last year with General Motors Co. (GM:US), and it introduced the Peugeot 301 sedan in November in Turkey, part of a strategy to expand in emerging markets.
Peugeot fell as much as 2.8 percent to 6.04 euros and was trading down 0.7 percent at 1:15 p.m. in Paris. The stock has plunged 42 percent in the past 12 months.
The carmaker’s financial woes, which included consuming 200 million euros in cash monthly as of mid-2012, prompted the company to sell some non-manufacturing assets and seek 11.5 billion euros in refinancing for the consumer-finance unit, Banque PSA Finance, including a French government guarantee on the division’s bond sales.
Disposals have included the Citer vehicle-rental business and a majority of its Gefco trucking unit. The sale of a stake in Peugeot’s Faurecia (EO) part-making division isn’t planned, Frederic Saint-Geours, the carmaker’s head of brands, said today at a Paris press conference. Peugeot and Faurecia shares jumped two days ago amid speculation about a disposal.
Peugeot plans to sell more cars this year as the global auto market expands 3 percent to 4 percent this year, including an increase of 5 percent in Russia, Saint-Geours said. Peugeot predicted that industrywide sales in Europe will fall 3 percent to 5 percent this year. Saint-Geours said France’s market alone will contract at that rate.
The company no longer supplies component kits to any partners after halting supplies to Iran last year because of international trade sanctions. Excluding the kits, Peugeot’s fourth-quarter deliveries declined 6.9 percent to 719,000 cars and vans, with full-year deliveries on that basis falling 8.8 percent to 2.82 million. European sales in the quarter dropped 15 percent, and Latin American demand fell 7 percent.
Twelve-month sales slid 6.1 percent to 1.56 million vehicles at the Peugeot brand and 12 percent to 1.27 million autos at the Citroen marque.
The economy of the 17 nations using the euro entered a recession in the third quarter, and the European Central Bank forecasts a contraction in the bloc’s gross domestic product of 0.3 percent in 2013. The European Automobile Manufacturers Association, or ACEA, has predicted that sales in the region last year would fall to about 12 million cars, the lowest figure since 1995. The group is scheduled to release registration numbers for 2012 in mid-January.
The proportion of cars that Peugeot sold outside the region increased to 38 percent last year from 33 percent in 2011, and “the group confirms its target of generating 50 percent of sales outside Europe in 2015,” it said.
Industrywide car sales in France fell 14 percent last year, according to the country’s automakers’ association. Peugeot’s deliveries dropped 18 percent, and domestic competitor Renault SA (RNO)’s sales plunged 22 percent. Including light commercial vehicles, the French market shrank 13 percent, with declines of 17 percent at Peugeot and 20 percent at Renault. The French carmakers’ sales declines also exceeded the market’s drop last year in Germany, Europe’s biggest economy.
France’s government agreed in October to guarantee as much as 7 billion euros in new bonds sold by Banque PSA Finance in exchange for Peugeot board seats for representatives of workers and the state.
French authorities notified the European Union about the guarantee, Pierre-Olivier Salmon, a Peugeot spokesman, said today by phone, confirming a report in Les Echos newspaper.
Temporary EU authorization for the guarantee, which is subject to the bloc’s rules limiting state aid to companies, should be granted in less than two months, with a permanent clearance to follow, Saint-Geours said at the press conference. Peugeot’s reorganization “should be in line with the kind of things the European Union asks for,” he said.
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