PSA Peugeot-Citroen managed to outperform BMW and Mercedes in profitability

PSA Peugeot-Citroen managed to outperform BMW and Mercedes in profitability

September 3, 2019 0 By autotimesnews

BMW and Mercedes-Benz have traditionally demonstrated the highest profitability in the industry. However, to date, German companies are not showing the best financial statements, but PSA Peugeot – Citroen, on the contrary, managed to achieve impressive results, reports Automotive News Europe.

In the first half of 2019, the profitability indicator according to International Financial Reporting Standards fell to 2.8% for BMW and 1.4% for Mercedes-Benz. These are very sad results, given the fact that the companies themselves are striving for results of 8 and 10%, respectively.

But Volkswagen and its Audi and Skoda feel very good: profitability has grown to 5.2%, 8.0% and 8.1%, respectively. But the PSA sets records, whose profitability in the first half of the year jumped to 8.7%.

Why is the PSA on horseback, and BMW and Mercedes-Benz in decline? Several factors led to this state of affairs at once. Firstly, BMW and Mercedes-Benz are constantly increasing investments in the development of electric vehicles, and this area is “eating up” a significant part of the profits. Secondly, both brands suffered from a deterioration in US-China relations.

Sales of new cars in the Celestial Empire continue to fall, and with them the profit of German premium brands, which for many years have been earning in the growing Chinese market, is decreasing. Along with this, trade restrictions affect the export of Mercedes-Benz GLE and BMW X5 crossovers from the USA to China.

At the same time, the situation is different for the PSA. 2019 also failed for the concern in China: sales literally collapsed. According to the results of the first half of the year, Citroen lost 59.8% of sales, Peugeot – 63.5%. Catastrophe? Yes, the results are not encouraging, but at the same time, the French have never earned big money in China. It accounts for approximately 0.6-0.7% of sales. So against the global backdrop, the failure in China no longer looks so noticeable.