PSA Peugeot Citroen, Europe’s second-biggest carmaker, said first-quarter revenue rose 4.6 percent from a year earlier as deliveries increased in China.
Sales increased to 13.7 billion euros ($15 billion) from 13.1 billion euros a year earlier, the Paris-based company said Wednesday in a statement. That beat the 13.5 billion-euro average of seven analyst estimates compiled by Bloomberg. Peugeot, which said a week ago that it’s adding production in Europe to meet rising demand, raised its 2015 growth forecast for the region’s car market to 4 percent from 1 percent.
“Pricing has obviously played a positive role,” Georges Dieng, a Paris-based analyst at Natixis who recommends buying Peugeot shares, said by phone. “The growth trend of the European market has created a more favorable environment for price performance, which is a good thing for the bottom line.”
Peugeot, which posted its first annual profit in three years in 2014, has teamed up with China’s Dongfeng Motor Corp. to expand outside its home region. Chief Executive Officer Carlos Tavares, now one year in his post, is working to maintain earnings momentum by streamlining Peugeot’s product line, adapting production to economic contractions in Russia and Latin America and strengthening the differentiation of its three brands, including the newly created premium DS nameplate.
“We remain focused on carrying our targeted measures through to completion, irrespectively of the tailwinds we’ve enjoyed so far this year,” Chief Financial Officer Jean-Baptiste de Chatillon said in the statement.
Revenue from new vehicles, excluding the company’s share of Chinese joint ventures, increased 1.1 percent, helped by price increases, deliveries of more upscale models and currency effects, Peugeot said. The French carmaker reiterated forecasts that China’s car market will expand by about 7 percent this year, while demand will fall 10 percent in Latin America and 30 percent in Russia.
In partnership with Dongfeng, Peugeot is targeting a 5 percent share of China’s industrywide car sales in 2015, which has overtaken France as the manufacturer’s largest national market. The figure for Peugeot, Citroen and DS alone was 4.4 percent last year. The French and Chinese companies plan to double their combined annual sales in China and markets in the Association of Southeast Asian Nations to 1.5 million vehicles in the six years through 2020.
The French company reiterated a 2018 deadline for operating profit from carmaking to reach 2 percent of revenue and said it wants the margin to rise to 5 percent in the five years through 2023.