Fiat Joins Puegeot in Gains as Investors See RecoveryMathieu Rosemain
PSA Peugeot Citroen, Fiat SpA and Renault SA, whose European deliveries tumbled last year, have advanced more than 11 percent in the last week on investor optimism anticipate a gradual recovery of the region’s auto sales in the second half.
The three are the top performers among the eight members of the Bloomberg Europe Autos Index in the last week, with Peugeot gaining 18 percent since March 4, Fiat 15 percent and Renault 11 percent.
“If you know the first half will be lousy and the second a little better, now is the time to buy auto shares,” said Florent Couvreur, an analyst at CM-CIC Securities.
Industry executives forecast car sales in Europe will decline in 2013 for a sixth straight year, with a possible recovery of the market starting in last six months. Registrations in January dropped 8.5 percent to the lowest level for the month since the ACEA industry group began tracking sales in 1990, it said last month.
The three automakers’ shares have also advanced following labor deals at Renault and Fiat. Peugeot is seeking to push through its own restructuring to eliminate 11,200 jobs and close a factory on the outskirts of Paris.
Renault last week gained the backing of three unions to move forward with eliminating 7,500 jobs and freezing wages, boosting the French carmaker’s chances of smoothly carrying out its cost-reduction plan. Fiat reached an agreement March 8 on a contract renewal with Italian workers for 2013 that increased monthly pay by 40 euros, according to the Cisl union.
“The fact that Renault struck a deal with its unions indicates that Peugeot may do the same,” said Xavier Caroen, a Paris-based analyst at Kepler Capital Markets.
Fiat gained as much as 16 cents, or 3.6 percent, to 4.58 euros and was up 1.7 percent as of 12:30 p.m. in Milan trading. Renault was down 1.3 percent today in Paris, while Peugeot was 2.4 percent lower.