Vehicle sales of French auto maker PSA Peugeot Citroen (UG.FR) fell by 4.9% in 2013 compared to the previous year, hindering the loss-making company’s efforts to return to profitability.
Peugeot is engaged in advanced discussions with its Chinese partner Dongfeng Motor Co and the French state about a capital injection of some three billion euros ($4 billion) that it needs to be able to finance industrial, research and development and commercial projects to ensure its future in an increasingly difficult marketplace.
The company’s board, meeting on Sunday evening, gave the go-ahead for executives to negotiate the terms of the capital restructuring that will see Dongfeng and the state become core shareholders. The financing will also involve a rights issue.
Europe’s second-largest automobile manufacturer by volume after Germany’s Volkswagen AG (VOW.XE) said Monday it had sold a total of 2,819,000 vehicles last year. However, the company pointed out that sales of its assembled vehicles rose by 4% in the last three months of the year compared to the same period of 2012.
Peugeot said 42% of its sales last year were outside Europe, up from 38% in 2012, and said it remains on track to bring this up to 50% by 2015.
Peugeot’s sales in Europe fell by 7.3% in a market that contracted by just 1.6%.
Peugeot has been losing market share steadily in its core European market in recent years. Its share shrank to 11.1% last year from 11.9% in 2012 and 13.5% in 2007, before the financial crisis sparked by the failure of Lehman Brothers hit the global economy, according to data collated by the European auto manufacturers’ association.
Peugeot was saved last year by a 26% surge in its sales in China, in a market that grew by 19%. Like other European auto makers, China is fast becoming Peugeot’s most important market.
Peugeot’s sales in Latin America rose by 7% in 2013, but dropped by 22% in Russia, where the group’s product line-up was ill-adapted to local consumer tastes.