Sales hurt Peugeot Citroen shares
July 7, 2012, 12:14 am TWN
PARIS -- The French auto group PSA Peugeot Citroen reported on Friday a 13-percent fall in its first-half global car sales, and its shares dropped 6.51 percent to 7.17 euros.
The group, which has tied up with U.S. giant General Motors, is in financial difficulties and is expected to announce restructuring measures.
The government is expected to announce action next week to help the French auto sector.
At Global Equities, broker Xavier de Villepion said: "The future of the group is gloomy."
The alliance with GM, announced at the end of February, had come late in the day, given PSA's poor state, he said.
A spokesman for the group told AFP that it had not asked the French state for a loan.
He was responding to remarks by the coordinator of a recent review of the group, Philippe Bonnin, who had said that PSA wanted such a loan.
Nobody at the industry ministry was available to comment.
At Citigroup, analysts said that the latest sales figures were disappointing, but had been expected.
"What worries us most regarding PSA is the state of its cash holdings, and this could affect its credibility with credit rating agencies and make financing more difficult," the Citi analysts said.
The capital of the company is controlled by the Peugeot family. General Motors owns 7 percent since the alliance.
It blamed the fall in sales on weak conditions on European markets and the halting of its activities in Iran owing to the effects of sanctions.
Sales in Europe fell by 18 percent to 980,000 cars and commercial vehicles, and the firm's share of the market fell to 12.9 percent from 13.9 percent.
Sales outside Europe rose with the exception of a 21-percent fall in Latin America to 122,000 vehicles.
Sales in Russia rose by 17 percent to 41,000 vehicles, and in China by 7 percent to 209,000. In the rest of the world sales rose by 12 percent to 124,000 vehicles.