By David Pearson
PARIS--French auto maker PSA Peugeot Citroen (UG.FR), which is
struggling amid slumping demand in Europe, said Friday its
first-quarter vehicle sales in China rose 31% from a year earlier,
driven by a 24% increase in sales of its Peugeot brand cars made in
cooperation with local manufacturer Dongfeng.
The first-quarter growth outstripped the 18% growth of the
overall market in the period and the 142,000 vehicles gave Peugeot
Citroen a 4% market share.
The company is aiming for a 5% market share by 2015, helped by
the launch of two new models--the Citroen C-Elysee and the Peugeot
301--and the opening of a third assembly plant in July under the
Dongfeng joint venture. In addition, a second local venture with
Chongqing Changan Automobile Co. (000625.SZ) will start production
later this year of the Citroen DS5, an up-market sedan, at a plant
with an annual capacity of 200,000 vehicles.
China was Peugeot Citroen's biggest single market in the first
quarter. Car sales in the company's home market fell 19% in the
first three months from a year before, and were down 15% in
Europe.
Separately, French media reports quoted the company's head of
Asian operations Gregoire Olivier as saying that he is targeting a
26% increase in the company's Chinese car sales this year to
557,000 vehicles, up from 442,000 in 2012.
Mr. Olivier was quoted as saying that the company's operating
margin in China was robust, at around 7%, in the first quarter, and
the joint venture with Dongfeng will provide a dividend of about
100 million euros ($130 million).
Mr. Olivier told French journalists ahead of the Shanghai Motor
Show that opens on Saturday that Peugeot Citroen is aiming for a
Chinese market share of 8% by 2020, including a 3% share for the
joint-venture with Changan.
He said the company will decide in the second half of this year
on the production of new hybrid gasoline vehicle that will meet
Chinese regulations for car makers to produce clean energy vehicles
to help combat China's chronic air pollution problem.
Write to David Pearson at david.pearson@dowjones.com
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