July 8, 2013 / 3:57 PM / 4 years ago

UPDATE 1-Peugeot deliveries fall 9.8 pct on Europe woes

3 Min Read

* Peugeot loses European market share in H1

* China sales surge 32 percent

* Peugeot reiterates European market outlook (Adds executive comment, details)

By Laurence Frost

PARIS, July 8 (Reuters) - PSA Peugeot Citroen said its global vehicle sales fell 9.8 percent in the first half as it lost ground in a shrinking European market, partly offset by gains in China and Latin America.

Peugeot's group deliveries tumbled to 1.46 million vehicles from 1.62 million a year earlier, the Paris-based carmaker said in a statement on Monday.

In Europe, where demand for new cars contracted 7 percent, Peugeot's sales dropped 13 percent as it outpaced the decline in France and other countries, cutting its regional market share to 12.1 percent from 12.9 percent.

Peugeot, among the worst casualties of a five-year European auto slump that led to a 5 billion euro ($6.4 billion) net loss and a state-backed debt rescue in 2012, is racing to expand overseas.

"Our strategy of international development to reduce our dependence on Europe is in progress and working," Citroen brand chief Frederic Banzet told reporters on a conference call.

Sales in China surged 32 percent in the first half to 278,000 vehicles, twice the market expansion, helped by demand for the Peugeot 3008 minivan, which recorded 25,000 deliveries.

The company plans to accelerate its Chinese expansion in the second half by rolling out new models such as the no-frills Peugeot 301 compact and Citroen C-Elysee, as well as the upscale DS5 mid-sized car.

Latin American sales also jumped 21 percent, more than triple the market's 6 percent expansion, helped by strong sales of the Peugeot 208. The subcompact has posted 400,000 sales globally in the first year since its launch.

But Peugeot's overseas performance was punished by its decision last year to halt sales to Iran, under pressure from international sanctions.

The move cost Peugeot 142,000 deliveries of partially assembled "knock-down" vehicles, compared with the previous year. Excluding Iran sales, the French carmaker's global deliveries fell a more modest 1.1 percent.

The Citroen brand chief reiterated Peugeot's European market forecast of a 3 to 5 percent decline in 2013. ($1 = 0.7792 euros) (Additional reporting by Gilles Guillaume Editing by James Regan)

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