French carmaker PSA on Wednesday blamed falling demand in Europe and China, as well as exchange rate movements, in posting a drop in third-quarter sales. PSA, the second largest car manufacturer in Europe and behind the Peugeot, Citroen and DS brands, said sales came in at 11.4 billion euros ($12.4 billion) for the quarter, down 8 percent from the same period last year.
Finance director Jean-Baptiste de Chatillon cited a sales "environment more difficult" than expected, not least in the wake of Britain's vote to quit the European Union. However he said in a statement that was "very confident" in the group's ability to hit five-year strategic targets. In volume terms, third-quarter sales rose 10.6 percent over the same period of 2015, aided by 105,000 sales in Iran out of a total 681,100 units PSA shifted world-wide in the third quarter, compared with rival Renault's world-wide total of 721,741.
Earlier this year, PSA struck a 400-million-euro deal with Iran's Khodro to build 200,000 Peugeot vehicles a year in Iran by 2018. Sales in Europe - its main market - slipped 4.3 percent to 368,200 units and fell 16.5 percent to 125,900 units in China and Southeast Asia.
For China alone, sales were down 17 percent in the third quarter and off 19 percent January to the end of September. For the year as a whole, PSA, whose shares dipped in early trading before recovering but are still down on the year by some 15 percent, is banking on sales rising 6 percent in Europe and 15 percent in China. PSA said it would launch new products in the fourth quarter, including a revamp of its popular Citroen C3 supermini.
Also on the new arrivals ramp are Peugeot 3008 and 5008 4x4 models showcased at the Paris Motor Show and set to hit showrooms by the spring. The group is pinning its hopes on its "Push to Pass" recovery plan to aid 2016-2021 growth notably by anticipating changes in car usage patterns.