AutoBeta(AutoBeta.net)02/27 Report--

On February 26th, Peugeot-Citroen (PSA) released its 2019 results. The financial report shows that in 2019, PSA achieved an overall operating income of 74.731 billion euros (about 571.7 billion yuan), an increase of 1 percent over the same period last year; operating profit of 4.668 billion euros, an increase of 6.1 percent over the same period last year; and adjusted operating profit of 6.324 billion euros (48.3 billion yuan), an increase of 11.2 percent over the same period last year. In 2019, PSA's net profit attributable to the parent company was 3.201 billion euros (24.4 billion yuan), up 13.2% from a year earlier.

PSA said in its financial report that the profit margin was still 8.5 per cent amid rising raw material costs and the negative impact of exchange rates on its business, offsetting the decline in car sales mainly by selling higher-priced SUV models and reducing production costs. Specifically, PSA cut procurement costs through the acquisition of the Opel / Vauxhall brand and sold higher-priced SUV models, driving operating margins to a record 8.5 per cent.

In 2019, PSA Group's auto business generated revenue of 58.943 billion euros (450.1 billion yuan), up 0.7 percent from a year earlier, while adjusted operating profit was 5.037 billion euros (38.5 billion yuan), an increase of 12.8 percent over the same period last year. In 2019, PSA (including Peugeot, Citroen, DS, Opel and Vauxhall) achieved global sales of 3.49 million vehicles, down 10 per cent from a year earlier. In terms of specific markets, PSA Group's sales in India and the Pacific, Eastern Europe and Russia were 27000 and 16000 respectively, a slight increase of 0.6% and 2.3% over the same period last year. Sales in the European market, Latin America, the Middle East and Africa, China and Southeast Asia all declined sharply.

Of these, the European market sold 3.03 million vehicles in 2019, down 2.5% from the same period last year; Latin America sold 136000 vehicles in 2019, down 22.5% from the same period last year; and the Middle East and Africa region sold 164000 vehicles in 2019, down 43.5% from the same period last year. China and Southeast Asia sold 1.17 million vehicles in 2019, down 55.4% from the same period last year.

In terms of major markets, the biggest decline was in China, where PSA suffered losses and writedowns of 700 million euros (5.4 billion yuan) due to a sharp drop in sales there. In terms of brands, Peugeot sold 63600 vehicles, down 55.7 per cent from a year earlier; Citroen sold 51000 vehicles, down 55.3 per cent; and Opel sold 248vehicles, down 57.3 per cent from a year earlier, down 57.3 per cent from a year earlier, down 46.6 per cent from a year earlier.

PSA has two joint ventures in China, one is Citroen, a joint venture between PSA and Dongfeng Motor, and the other is Changan Peugeot Citroen formed by PSA and Changan Motor.

Founded in 1992, DPCA is a joint venture between Dongfeng Motor and French PSA Group, which owns two major car brands, Dongfeng Citroen and Dongfeng Peugeot. As a representative of legal brands, DPCA does not have a high sense of existence in the Chinese market.

With sales of 704000, 704800, 378000, 253400 and 113600 respectively from 2014 to 2019, Dragon Motor has been gradually marginalized in the Chinese market. DPCA is also destined to have a hard time in 2020, especially under the epidemic, DPCA is located in the worst-hit area of Hubei, and the company plans to stop production until March 10, which means that the company's performance will decline further this year.

By contrast, Changan PSA, established by PSA and Changan Automobile in 2011, entered the Chinese market much later than Shenlong Automobile. Changan PSA mainly sells the DS brand of PSA Group, but due to sluggish sales and profit losses, Changan Automobile and PSA Group put up for sale their 50% stake in Changan PSA in October and November last year, and Baoneng Group finally transferred 50% of Changan PSA.

The Chinese market can be said to be a big failure of PSA Group. To reduce the risk of operating in China, Citroen launched a six-year "yuan" revival plan in September 2019, which aims to boost sales of Peugeot and Citroen brands to achieve profitability and a lower break-even point.

As for the DS brand, although Changan Automobile and PSA Group have sold their shares, PSA said that the DS brand will remain in China and develop vigorously and will not withdraw from the Chinese market. It is understood that the new model DS 9, which will be sold all over the world in the future, will be produced in China, and the new car will be officially launched in the second half of 2020.

In addition, in order to reduce the pressure on the global auto market and improve the competitiveness of its products, the PSA Group signed a binding merger agreement with FCA (Fiat Chrysler) in December last year, which stipulates that the businesses of the two sides will be merged at 50:50 to create an automobile group that ranks fourth in sales and third in revenue. It is understood that the combined company will start operation from the end of 2020 to the beginning of 2021.

Tang Weishi, chairman of PSA Group, said, "We are ready for the energy transformation, and all the teams of the company are focusing on providing customers with environmentally friendly, safe and affordable travel solutions. We also look forward to the planned merger with the FCA Group that will bring us into a new era. "

According to the product plan, PSA Group will have five new energy vehicles listed and sold in China in 2020. However, under the premise that the current automobile market remains in the doldrums, and under the background of the sharp drop in automobile consumption caused by epidemic prevention and control, there are also many variables in the development of PSA Group in 2020.

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