Global Insight Perspective | |
Significance | Like its rival Renault, PSA's 2007 sales growth was driven by double-digit demand in markets outside Europe, including Russia and the resurgent Mercosur region. The first full-year of sales of some of its most important vehicles, namely the Peugeot 207 but also the Citroën C4 Picasso also helped PSA grow its share of Western Europe for the first time since 2002. |
Implications | As PSA still relies on its home market of France for almost one-quarter of its total vehicle sales, and on Western Europe (including France) for 70% of its global volumes, PSA needs all the sales it can get in markets like Russia and South America, given the maturity of Western Europe where incremental sales are so few and far between. |
Outlook | PSA is predicting a 5% increase in 2008 volumes, to between 3.55 and 3.6 million vehicles, enabled by a number of new model launches, an improvement in its home market of France and continued growth in other parts of the world, including Russia, China, Brazil and Argentina. Looking to the longer term, PSA is in an enviable position as the manufacturer with one of the lowest average emission fleets out of any manufacturer in the world, which will undoubtedly stand it in excellent stead, especially in its all-important market of Western Europe. |
Russia and South America Drive PSA's Growth
France's number one vehicle manufacturer and Europe's second-largest, PSA-Citroën, reported a 3.8% increase in worldwide sales of cars and light commercial vehicles (LCVs) yesterday to a total of 3,233,000 units for the full-year 2007. Predictably, the bulk of this growth came from markets outside Western Europe, most notably Russia and South America, although the group also managed its first year-on-year (y/y) growth within Western Europe since 2002. Group sales accelerated notably in the second half of the year, increasing by 6.2% compared to the previous year, after seeing a much more subdued 1.7% y/y growth in the first half.
PSA's Global Light Vehicle Sales by Brand and Region | ||||
Region | Brand | 2006 | 2007 | % Change |
Western Europe
| Peugeot | 1,224,900 | 1,223,000 | -0.10 |
Citroën | 1,071,300 | 1,099,000 | 2.60 | |
Total PSA | 2,296,200 | 2,323,000 | 1.20 | |
Eastern Europe
| Peugeot | 60,000 | 70,000 | 16.40 |
Citroën | 54,000 | 62,000 | 14.50 | |
Total PSA | 115,000 | 132,000 | 15.50 | |
Russia
| Peugeot | 16,000 | 26,000 | 63.10 |
Citroën | 13,000 | 10,000 | -21.30 | |
Total PSA | 29,000 | 37,000 | 25.00 | |
Mercosur
| Peugeot | 115,000 | 141,000 | 22.30 |
Citroën | 52,000 | 75,000 | 46.30 | |
Total PSA | 166,000 | 216,000 | 29.70 | |
China
| Peugeot | 82,000 | 93,000 | 13.70 |
Citroën | 121,000 | 116,000 | -4.10 | |
Total PSA | 203,000 | 209,000 | 3.10 | |
Rest of World
| Peugeot | 225,000 | 232,000 | 3.30 |
Citroën | 81,000 | 85,000 | 4.30 | |
Total PSA | 306,000 | 317,000 | 3.60 | |
Total Assembled Vehicles
| Peugeot | 1,723,000 | 1,786,000 | 3.70 |
Citroën | 1,392,000 | 1,448,000 | 4.00 | |
Total PSA | 3,115,000 | 3,233,000 | 3.80 | |
CKD Units
| Peugeot | 237,000 | 181,000 | -23.50 |
Citroën | 14,000 | 13,000 | -5.40 | |
Total PSA | 251,000 | 195,000 | -22.50 | |
Total Assembled Vehicles & CKDs
| Peugeot | 1,959,800 | 1,967,000 | 0.40 |
Citroën | 1,406,100 | 1,461,000 | 3.90 | |
Total PSA | 3,365,900 | 3,428,000 | 1.80 | |
Source: PSA | ||||
PSA is not alone amongst its European rivals in gradually seeing its volumes slide in the now-mature market of Western Europe, as hungry Japanese and Korean rivals have tended to eat up the little growth that the market has shown, and often more besides. So a 0.9% y/y increase in registrations in a region which grew by 0.7% came as welcome news to the group. "After several years of market share decrease, the Group's market share [in Western Europe] held firm at 13.8% (7.3% for Peugeot and 6.6% for Citroën) in a challenging business environment," PSA said in a statement. However, the larger of PSA's two brands, Peugeot actually reported lower Western European sales for 2007, leaving the smaller Citroën brand to increase its presence in the region.
Last year, Citroën accounted for 45% of global group sales, and Peugeot 55%, meaning that Peugeot sold 340,000 more units in total than its sibling.
The Peugeot 207, which was launched towards the end of 2006, exceeded its annual sales target for the year of 500,000 units, PSA said, selling 521,000 units in total. In addition, that car's predecessor, the 206, which is still on sale around the world as an entry-level car and which is being launched in new countries, such as China, Iran and Malaysia as a competitor to budget cars like the Renault Logan sold 309,000 units, taking combined sales of the group's most important model range to 830,000. That means that the 206/207 accounted for an impressive 46.5% of the Peugeot brand's 2007 sales and over a quarter of the PSA group's total sales.
Citroën's highlight for the year was named as the warm reception to the Citroën C4 Picasso compact multi-purpose vehicle (MPV) of which more than 200,000 units were sold in 2007. Again, that car's predecessor, the Xsara Picasso is also still on sale as a cheaper, more basic compact MPV, and 120,000 units of that model were sold around the world in 2007.
Good News to Report Regarding LCVs and the Environment
PSA continues to lead Europe's light commercial vehicle (LCV) market, with 387,000 registrations, which is a 4.9% rise on the year earlier. A number of new model launches early on in 2008 mean that PSA's LCV range will have an average age of just 2.2 years, giving it good prospects for further growth in 2008, the company said.
For obvious reasons and quite rightly so, PSA was keen to point out the environmental gains it continues to make. For the second year in a row, the Group sold one million vehicles emitting less than 140 g/km CO2, of which 750 000 emitted less than 130 g/km CO2. This means that more than every one in four sub 130g-km cars sold in Europe last year were either Peugeots or Citroëns, with PSA taking a 26% share of the European sub-130 g/km CO2 segment.
Outlook and Implications
In a statement, PSA forecast that its European sales will grow at a faster rate in 2008 compared to 2007. Whilst it expects the size of the European market to remain at 2007 levels in 2008 and still be highly competitive, the new year "will mark a new phase in the model renewal process", it said. This will include the launch of the new Citroën C5, the expansion of the Peugeot 308 line-up, and the introduction of the Citroën Nemo and Peugeot Bipper small commercial vehicles, as well as the new Citroën Berlingo and Peugeot Partner. "Combined with the ramp-up of the models introduced in 2007, these new models should drive faster growth in the Group's European unit sales," PSA said. Consequently, it expects to sell between 3.55 and 3.6 million assembled vehicles and completely knocked down (CKD) kits during the year, which would represent a growth of around 5% compared to 2007's levels, "in line with the CAP 2010 action plan." Just like in 2007, this growth will be stronger in the second half of the year than in the first six months, because of the timings of its model launches.
Dow Jones reports that in two separate press conferences to announce the results, the chiefs of both Peugeot and Citroën set out their individual sales performances for this year. Citroën's Gilles Michel is targeting sales of between 1.53 million and 1.58 million in 2008, which would be a 4.4–7.8% sales increase 2007's levels. Peugeot's new boss, Jean-Philippe Collin, meanwhile, is looking for sales of 2.03–2.08 million, representing a 2.9–5.5% growth on 2007.
Although PSA's overall sales performance in 2007 beat that of its rival Renault, whose global sales grew by a lesser 2.2% last year (see France: Friday 4 January 2007: Renault Manages 2.2% Global Sales Growth in 2007, Driven by Increases Outside Europe), Renault has far bigger plans than PSA for 2008, predicting a minimum 10% y/y sales growth, against PSA's forecast 5%. However, PSA remains in an enviable position in the long term, well placed to take advantage of most of the world's major growth markets and excellently placed in Europe to lead the rush to low-emission vehicles, as looks inevitably one day to be the case thanks to future region-wide legislation.