Peugeot says Europe sales falling

PSA Peugeot Citroen shares

Strong demand for new models at home and in Russia, Brazil and Argentina raised PSA Peugeot Citroen sales 4.6% to 1,845,000 in the first six months.

Europe's second biggest carmaker said it maintained its global sales growth objective of 5% for 2008 as a whole.

But in Western Europe, sales fell 3.5%, with an overall 4% fall in sales in the region expected this year.

Shares in the French carmaker closed 1.4% lower on concerns about the sales outlook in Western Europe.

The overall sales in many European key markets, including Spain and Italy, were down in spite of strong sales of its newest models, the Peugeot 308 and a very well received new versions of the Citroen C5.

Sterling weakening against the euro sent UK sales down 7.9% to 140,000.

But in its vital home market, sales rose 5.3% to 439,000.

Emerging growth

In emerging markets, sales rose considerably faster, up 61.5% in Russia, 38% in Brazil and 12.6% in Argentina, with continued double-digit growth expected.

Although the growth has been strong in its emerging markets, sales started from relatively low level, with 25,200 cars sold in Russia and 75,900 in Brazil.

Both the company's marques, Peugeot and Citroen, stand to gain from changing consumer preferences towards smaller cars with smaller, more fuel efficient engines that emit less CO2 than many of their rivals.

The company sold 520,000 vehicles emitting less than 140 grams of CO2 per kilometre in the first six months of the year.

"PSA Peugeot Citroen confirms its leadership in the segment of low consumption and low C02-emitting vehicles," its statement said.