1st-half sales of PSA/Peugeot-Citroen fall as VW’s profits break records

Article by Anita Panait, on July 27, 2012

The next two days would be eventful for two of the largest car manufacturers in Europe. French carmaker PSA/Peugeot-Citroen will be reporting its first half 2012 results on July 25, 2012, while German auto company Volkswagen Group will also be disclosing its own earnings for the first six months of year. The two auto groups, however, are expected to present different fates.

PSA is predicted to divulge first-half losses, as it struggled to sell new cars in the first half of 2012. VW, meanwhile, is expected to disclose record profits, as it embarked to expand in other markets through the year.  The fates of these two carmakers could be traced from their strategies for the past decade.

While VW increased working hours for its German workers, established eight factories in China, opened a plant in the US and invested billions in Audi, its French counterpart almost did nothing. Rather, it failed to develop a luxury brand, gave up on the US market in the 1990s and had a slow start in Asia.

While VW has been very successful in posting profits, PSA is now trying to stave off oppositions from the French government over plans to lay off 8,000 employees and shut down a factory. 

Thilo Mueller, managing director of MB Fund Advisory GmbH, remarked that PSA “slept through some developments” and failed to capitalise on the success of individual models to attract more interest in the brand. According to median estimate of seven analysts surveyed by Bloomberg, PSA is bound to post EUR91 million ($110 million) in losses for the first half of 2012, while Bloomberg is destined to report a 5.6 percent increase in operating profit to a record EUR6.4 billion.

Topics: psa, peugeot, citroen, sales

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