Peugeot CFO Forecasts Fourth-Quarter Market Share GainsMathieu Rosemain
PSA Peugeot Citroen, Europe’s second-biggest carmaker, forecast a fourth-quarter market share increase on the continent as new models boost demand.
“We’ll have a clear improvement of our market share” in the final three months compared with the 11.5 percent achieved in the third quarter, Chief Financial Officer Jean-Baptiste de Chatillon said in an interview today. The new 2008 urban crossover and 308 hatchback will help push the gains, he said.
Peugeot remains on target to cut its cash-consumption rate by 50 percent this year and is on track for a “very significant reduction” in 2014, the CFO said.
Peugeot, which reported a first-half operating loss in its automotive unit of 510 million euros ($691 million), burnt through 3 billion euros last year. The automaker is considering stake sales via capital increase to Chinese automaker Dongfeng Motor Corp. and the French government to boost funding, people familiar with the matter said this week.
“There’s absolutely no problem of liquidity or financial security,” Chatillon said. “We’re actively working to identify valuable and profitable industrial partnerships. There’s no project that has reached a maturity that would allow us to comment.”
The stock has plunged 16 percent this week on investor concern over the automaker’s financing. The French automaker has a market value of 3.49 billion euros. The shares fell as much as 1.16 euros, or 11 percent, to 9.56 euros in Paris trading today and were down 6.7 percent as of 3:15 p.m.
The Paris-based company will discuss a capital increase at a scheduled meeting on Oct. 22, said the people, who asked not to be named because the gathering is private. The automaker reports third-quarter revenue figures a day later.
“When I speak to Peugeot dealers, they’re very happy with the 308 and the 2008,” said Erich Hauser, a London-based analyst at International Strategy & Investment Group who recommends buying the shares. “With the new model line-up, you should see gains in the fourth quarter. Everyone was only willing to look at the negative side and there are two sides to that story -- not all of it might be entirely negative.”
Peugeot plans to eliminate 11,200 jobs in France by 2015 and close a car plant in Aulnay, on the outskirts of Paris as the region’s auto market tumbles for a sixth straight year. Peugeot deliveries last month in Europe dropped 3 percent, while industrywide sales in the region rose 5.5 percent, according to data released today from the ACEA industry group.
“The restructuring plan we’re implementing leads to fixed-costs cuts that are exactly in line with what we’ve announced,” he said. “We’re completely in line with our cost-cutting forecasts, which is quite essential given the market situation in Europe.”
Peugeot is asking unions to cut overtime pay by 20 percent to 25 percent and freeze salaries in 2014. In exchange, the manufacturer has vowed to spend 1.5 billion euros to upgrade French factories over the next three years and raise production 7.5 percent to at least 1 million autos.
The automaker plans to build at least one new model in each of its five French assembly plants in the coming three years to bring capacity utilization to 100 percent in 2016 from 61 percent in the first half.
Management last week held its final meeting on the proposal with unions, which have until Oct. 22 to decide whether to accept it.