Before the crucial phase of the merger with Fiat Chrysler can he OpelParent companyPPEhave a robust business and full order books. In the third quarter, sales in the auto division rose by 1.2 percent to almost twelve billion euros. One reason is that the French group again sold more profitable vehicles such as SUVs and was able to enforce higher prices.
PSA was able to compensate for the drop in sales of 12.7 percent to around 589,000 vehicles. The sales of the subsidiary Opel and its British sister Vauxhall fell particularly sharply (minus 22.3 percent). Incoming orders were stable, said CFO Philippe de Rovira. From January to the end of September, Opel sold 417,000 cars, a decrease of more than 45 percent compared to the same period last year. Nevertheless, one is profitable, as Opel boss Michael Lohscheller emphasized to the “FAZ”: “Even if the volume is low, we can earn money with every vehicle.”
Including the supplier Faurecia belonging to the group, the sales of the PSA group shrank slightly to 15.5 billion euros. After nine months, consolidated sales were 40.6 billion euros, a quarter lower than in the same period of the previous year. With other competitors, the decline in sales after nine months is roughly the same. The French only provide information on profit in the annual financial statements.
The French reaffirmed the target of an average operating return of more than 4.5 percent in the auto division for the period 2019 and 2021 despite further massive restrictions in the fight against the CoronavirusPandemic that could also affect car demand in the next few weeks.
Beyond the corona-related economic crisis, PSA sees its planned mega-merger with Fiat Chrysler on the right track. In a conference call with analysts, Rovira said that “very good progress” has been made in preparing for the merger. The companies have agreed “common terms” for the merger.
The manufacturer with the original brands Peugeot and Citroën is sticking to the schedule of completing the merger with the Italian-American competitor to become the world’s fourth largest manufacturer by the end of March. The new group with large pillars in Europe and North America will be called Stellantis. Fiat Chrysler (FCA) carries the brands Alfa Romeo, Dodge, Jeep and Maserati, among others. There are still several competition authorities to give the green light, including the EU Commission in Brussels.
Fiat Chrysler makes billions again
Fiat Chrysler itself reported a billion dollar profit in the third quarter on Wednesday. The bottom line was the net profit was 1.2 billion euros. A year earlier, high depreciation in the troubled European division had led to a loss of 179 million euros.
Similar to PSA, the future partner of the French succeeded in selling more expensive cars while sales fell at the same time. Earnings before interest and taxes climbed 16 percent to 2.3 billion euros. Sales fell by 6 percent to 25.8 billion euros.
The North America division accounts for more than 70 percent of sales at FCA, and in the remaining divisions the group also continued operating in the red. Worldwide, Fiat Chrysler delivered 1.03 million vehicles in the third quarter, 3 percent fewer than a year ago. Half of the deliveries are in North America.
Fiat Chrysler, like other automakers, generated a strong inflow of funds in the third quarter. In the first half of the year, the warehouses were still full despite production stops in the corona lockdown, and FCA was now able to significantly reduce these stocks. Fiat Chryler posted provisions for US litigation primarily related to the diesel affair of € 222 million in the quarter.