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Peugeot maker PSA posts record profits ahead of FCA merger

PARIS — Peugeot maker PSA Group said its profitability reached a record high in 2019 but the French carmaker forecast falling industry sales in Europe this year as it pursues its merger with Fiat Chrysler, which is strong in North America. PSA has trimmed costs in areas such as the procurement of components as it has integrated its acquisition of Opel and Vauxhall, boosting operating margins to 8.5% last year. The group, which also produces cars under the Citroen and DS brands, offset a slump in vehicle sales by selling pricier SUV models, with launches including the Citroen C5 Aircross helping to lift revenues by a higher-than-expected 1% to $81.2 billion (74.7 billion euros). That helped it stand out in a car market where some rivals including France's Renault have struggled with sliding revenues and profits, amid a broader downturn in demand. PSA's group net profit increased 13.2% to a record 3.2 billion euros, and the company increased its dividend against 2019 results to 1.23 euros per share, up 58% from 2018 levels. The carmaker was "once again very solid", analysts at brokerage Oddo-BHF said in a note, adding the results confirmed the company's "best-in-class status." However PSA forecast a 3% contraction in Europe's car market this year, by far its biggest market. The tie-up with Fiat Chrysler will help it gain exposure to that group's strong presence in North America with brands like Jeep. The two companies struck a deal in December to create the world's No.4 carmaker, to better cope with market turmoil and the cost of making less-polluting vehicles. Fiat also posted more upbeat results than most rivals this year. CORONAVIRUS WEIGHS PSA boss Carlos Tavares told a news conference that the two groups were both in good shape and well placed to face market challenges together. He said he did not expect any major regulatory hurdles to the merger, adding it had so far submitted 14 approval requests to competition authorities out of the 24 it needs. There are no immediate plans to change anything in the large portfolio of brands within the combined group, he added. However the companies still face problems this year, including the coronavirus outbreak which has paralyzed production in China and hits carmakers' supply chain. PSA said the coronavirus impact was still difficult to assess. It factories in Wuhan, at the epicenter of the outbreak, are due to reopen in the second week of March.

10 cool cars from Peugeot's lineup we'd love to see in the U.S.

FCA and PSA are merging: The mega-alliance will not just bring a desperately needed technology boost to Fiat Chrysler, it will also open up potential U.S. sales venues to brands that have long been absent here. Citroen left in the 1970s, Peugeot deserted us 20 years later; Citroen's DS spinoff is a complete unknown in the States. Moreover, there's Opel, formerly a part of General Motors, with its UK-based Vauxhall attachment. As a brand, Opel was last seen here around 1970, its models sold through the Buick sales channel. Even though Opel is now part of the PSA empire, there is still significant overlap with Buick: The Buick Encore is an Opel Mokka, the Regal is an Insignia, and though this is its last model year in the States, the Cascada had been shared as well. But in Europe, the replacement of GM-shared platforms with PSA-Opel models is well under way, We have assembled 10 of the most interesting cars currently offered under the Citroen, DS, Peugeot and Opel/Vauxhall monikers. Should they be offered in the U.S.? We certainly think they deserve consideration. Citroen C4 Cactus Purist architecture in automotive form: The polarizing C4 Cactus is shaped by geometric lines, although it has recently been toned down and assumed a somewhat crossover-like stance that was absent before the facelift. Also lost is the funky full-width front bench that you could initially choose. Still, the C4 Cactus shuns conventional notions of aggressive and prestige-oriented design, opting for functionality and a product-design-like attitude. Sadly, it won't survive past its current generation. Citroen C5 Aircross Bigger and taller than the C4 Cactus, the C5 Aircross features even more of an SUV look, though it comes with front-wheel drive only. Controls and instruments have a reduced, product-design-like look, and the seat patterns offer a retrofuturistic interpretation of 1970s design. The "Advanced Comfort" chassis emphasizes ride quality, but the C5 Aircross is still surprisingly agile. No wonder, as Citroen has a proud rally heritage.  DS 3 Crossback This compact crossover oozes technology and luxury: Fitted with diesel or gasoline engines or with a fully electric powertrain, the DS 3 Crossback can be specified with a plethora of premium options. The cockpit plays with upscale patterns and materials; some dashboard versions are actually inspired by stucco veneziano. The diesel, our favorite engine option for this vehicle, is incredibly efficient and surprisingly torquey.

Stellantis ready to kill brands and fix U.S. problems, CEO Tavares says

  MILAN — Stellantis is taking steps to fix weak margins and high inventory at its U.S. operations and will not hesitate to axe underperforming brands in its sprawling portfolio, its chief executive Carlos Tavares said on Thursday. The warning for lossmaking brands is a turnaround for Tavares, who has maintained since Stellantis was created in 2021 from the merger of Italian-American automaker Fiat Chrysler and France's PSA that all of its 14 brands including Maserati, Fiat, Peugeot and Jeep have a future. "If they don't make money, we'll shut them down," Carlos Tavares told reporters after the world's No. 4 automaker delivered worse-than-expected first-half results, sending its shares down as much as 10%. "We cannot afford to have brands that do not make money." The automaker now also considers China's Leapmotor as its 15th brand, after it agreed to a broad cooperation with the group. Stellantis does not release figures for individual brands, except for Maserati which reported an 82 million euro adjusted operating loss in the first half. Some analysts say Maserati could possibly be a target for a sale by Stellantis, while other brands such as Lancia or DS might be at risk of being scrapped given their marginal contribution to the group's overall sales. Stellantis' Milan-listed shares were down as much as 12.5% on Thursday, hitting their lowest since August 2023. That brings the loss for the year so far to 22%, making them the worst performer among the major European automakers. Few automotive brands have been killed off since General Motors ditched the unprofitable Saturn and Pontiac during a U.S. government-led bankruptcy in the global financial crisis in 2008. Tavares is under pressure to revive flagging margins and sales and cut inventory in the United States as Stellantis bets on the launch of 20 new models this year which it hopes will boost profitability. Recent poor results from global carmakers have heightened worries about a weakening outlook for sales across major markets such as the U.S., whilst they also juggle an expensive transition to electric vehicles and growing competition from cheaper Chinese rivals. Japan's Nissan Motor saw first-quarter profit almost completely wiped out on Thursday and slashed its annual outlook, as deep discounting in the United States shredded its margins. Tavares said he would be working through the summer with his U.S. team on how to improve performance and cut inventory.