Opel Helps France's PSA Buck China, Iran Auto Downturn

French auto giant Groupe PSA, which makes the Citroen and Peugeot brands, reported record vehicle sales Tuesday as the acquisition of General Motors' Opel unit helped offset a sharp downturn in key markets China and Iran.

PSA sold 3.88 million vehicles, up 6.8 percent from 2017 when it acquired the Opel business which includes British-based Vauxhall.

PSA said that without the Opel contribution, 2018 sales would have been down 12 percent despite a strong showing in Europe.

Ranked second in Europe after Germany's Volkswagen, PSA said it did well last year to increase overall sales "for a fifth consecutive year... against a background of adverse economic and geopolitical winds."

The company failed, however, to hit the overall target of four million vehicles it had set, largely due to the impact of fresh sanctions imposed on Iran by US President Donald Trump and a slump in China.

PSA announced in June that it was suspending operations in Iran, where it would have expected sales of 300,000 vehicles.

In China, PSA said sales plunged more than 34 percent in an overall market down nearly six percent.

Total sales in China and Southeast Asia fell for a fourth consecutive year to 262,600.

PSA and its Chinese partner and major shareholder Dongfeng, sold 740,000 vehicles in China in 2014 and had targeted one million for last year.

The company said early last year that it hoped that new SUV models and upgrading its distribution network would boost sales in China.

In Europe, PSA said sales jumped 30.6 percent to 3.1 million vehicles, accounting for 80 percent of the total compared with 65 percent in 2017.

The Opel and Vauxhall brands chalked up sales of around one million vehicles.

Photo Credit: IRNA

French Carmaker PSA Says to Exit Iran Over US Sanction Risk

French automaker PSA said Monday that it would pull out of two joint ventures to sell its cars in Iran to avoid the risk of US sanctions after Washington withdrew from a key nuclear deal with Tehran.

"The group has begun to suspend its joint venture activities, in order to comply with US law by August 6, 2018," the maker of Peugeot and Citroen cars said in a statement.

European officials have vowed to try to shield their companies working in Iran from the reach of punishing US sanctions that are set to come into effect by November.

But with US President Donald Trump showing little inclination to spare EU companies, they must decide whether to continue to work in Iran if doing so puts their US operations at risk of huge fines.

PSA, Europe's second-biggest carmaker, signed deals with two Iranian automakers, Iran Khodro and Saipa, in 2016 after sanctions were lifted following the landmark 2015 accord aimed at prevent Tehran from developing nuclear weapons.

It was among several companies which rushed into Iran, hoping to meet pent-up demand in a country that had been squeezed by sanctions for years.

Last year PSA sold nearly 445,000 vehicles in Iran, making the country one of its biggest markets outside France.

Although it has been absent from the US market since 1991, the company said in January that it was hoping to launch a car-sharing service in one or two American cities.

But PSA, which also owns the Opel and Vauxhall brands, also noted that Iran sales still make up less than one percent of its total sales, and so exiting the country would not alter its financial guidance.

"With the support of the French government, Groupe PSA is engaging with the US authorities to consider a waiver," it said.

Yet the CEO of French oil giant Total, who was hoping to launch a major natural gas project in Iran, said last week that the chances of winning exemptions to the US sanctions were "very slim."

Photo Credit: IRNA