PSA Sales Slump in 1st Quarter 0

PSA, the group which heads Peugeot and Citroën, have suffered a big drop in their sales for the first financial quarter of 2016. The reasons for this can be found in a huge decline in their sales in the Chinese automotive market and other currency weaknesses. So, what is the reason behind the slump and will the PSA group be able to recover?

PSA PeugeotFirstly, at Servicing Stop, we reckon it will be very hard for PSA to regain a footing within the Chinese automotive market. This is because it has turned sharply towards more luxurious brands like Audi, BMW and Mercedes.  Although China overtook France to become PSA’s leading market in 2014, the 1st financial quarter of 2016 saw a 17.9 percent decrease in Chinese sales which, in business, is a huge decrease. On a global scale however, sales declined by only 1.7 percent as 699,800 vehicles were sold between Peugeot and Citroën. So sales have dropped radically in china but, units are still selling. It would be interesting to see how much of that 17.9 percent correlates to the 1.7 percent global figure.

It is obvious then that the reluctance of the Chinese market to buy PSA cars have resulted in the drop of global sales. Previously, China and Latin America have been PSA’s biggest markets, in recent years though; their respective markets have stagnated, leading to poor sales. But, there is a different story in Europe as sales have increased by 5.9 percent. PSA at this moment in time do not look to be in any financial trouble but, it must create a new strategy in order to regain the confidence of the Chinese buyer.

PSA do have a plan to advance back into the US after a 25 year absence and try selling again. If this is done successfully, then confidence will certainly be rediscovered in all their global markets.