EghtesadOnline: French automaker PSA Group posted an 11% increase in H1 profits following the repatriation of profits from Peugeot’s much older 206 and 405 models currently produced by Iran Khodro.
After only announcing production numbers earlier this month, PSA now says operating income rose to €2.04 billion ($2.37 billion) from €1.83 billion a year earlier, according to a press release from the firm.
Overall revenues increased 4.9% to €29.2 billion in the first half of 2017.
According to the worldwide sales report, PSA said 86,064 Peugeot 206s were produced in H1, an increase of 1243.3% y/y. Iran is the only country which continues to make this model, Financial Tribune reported.
This is while the three-decade old Peugeot 405 saw production skyrocket to 121,869 units advancing sales 1655.8% y/y, the company said. Again Iran continues to build the 405 model, while all other markets have ceased production.
Numbers show that Iran continues to play a major role advancing PSA sales with 207,900 vehicles sold in the country in H1 -- a 2.3% growth y/y.
Peugeot 2008 Flops Internationally
Meanwhile, the much flaunted (by IKCO) 2008 model has seen overall global sales sink to 120,284 units down 10.2% y/y. That model is to begin mass production in Iran but has faced several delays.
Another car not available in Iran, has also seen its sales increase significantly. The Peugeot 4008 crossover sales in the first half of this year reached 21,112, up 1375% y/y.
Of the all types of fuel cars, the only models that saw growth have been those burning gasoline. The company sold 896,552 units of gasoline cars, a 9.5% growth.
The jump in revenue and profits was a high note for the firm with Chief Financial Officer Jean-Baptiste de Chatillon saying “We improved the performance of all our divisions.”
He said despite poor sales in China, other regions [Iran] have helped boost profits for the firm.
The CFO did not name Iran directly, but previous reports clearly show the Iranian market has helped the company in the first half year taking over 74.7% of overall MENA sales.
Opel Deal to Solidify Europe Position
Besides the Iran boost, Chief Executive Officer Carlos Tavares is counting on new models, international expansion and the acquisition of Opel and Vauxhall to help the firm grow.
The company confirmed that it is targeting operating margin of more than 4.5% on average over the 2016-2018 period and over 6% by 2021, while revenues would grow by 10% between 2015 and 2018, with an additional 15% by 2021.
Iran Local Deals
PSA’s reemergence in Iran has seen the company create new joint ventures on the back of its former deals with Iran Khodro and SAIPA groups.
New projects include IKAP, which recently started local production of the Peugeot 2008 and import of completely built units of sale of the 301 and 508 models.
PSA’s Citroen also reached an agreement with SAIPA, Iran’s second automaker, in 2016 on a framework deal to produce and sell vehicles.
Based on the deal, the Paris-based carmaker will invest €300 million ($330 million) over five years for the development and production of three Citroen models, planned to be sold via an exclusive deal.
The Citroen C3, C4 and other smaller models are expected to be the first to rollout of the production lines.