PSA/Peugeot-Citroen logged a 6.5-percent drop in revenues in the first quarter of 2013 to EUR13 billion ($16.9 billion) from EUR13.9 billion in the same period in 2012, as the French carmaker’s overseas sales failed to offset slumping deliveries in Europe. PSA’s deliveries, excluding component kits for assembly, dropped 2.5 percent to 674,200 vehicles.
PSA reiterated plans to reduce cash consumption at its automotive-unit in 2013 by half to EUR100 million. The carmaker also reiterated a target to achieve a breakeven in operational cash flow by the end of 2014. PSA’s automotive unit posted a 10.3-percent slide in revenues in the first quarter of 2013 to EUR8.7 million, reflecting a 10-percent shrinkage in the European market.
PSA also saw its inventory drop 134,000 units to 414,000, in line with an adequate level for 2013. According to a posting at its investor Web site, PSA said that a further drop in Europe's market in 2014 may make new savings measures necessary.
PSA Chief Financial Officer Jean-Baptiste de Chatillon remarked during a conference call that the savings measures include the start of negotiations with French unions about competitiveness as well as the possibility of adapting capital expenditures. PSA expects the European car market to decline by around 5 percent this year.
PSA posted a EUR576 million operating loss in 2012, when Europe consumers couldn’t even be persuaded with price cuts. Europe accounted for 62 percent of the PSA deliveries and 68 percent of revenue in 2012. PSA posted a 15-percent decline in first-quarter vehicle deliveries in Europe, according to the ACEA car-industry group. The carmaker saw its sales drop 27 percent in Russia, but managed to post improvements in Latin America (25 percent) and in China (31 percent).