PARIS, April 28 (Reuters) - France's top carmakers Renault and PSA
Peugeot-Citroen have started the year 2000 where they left off 1999 -- in
overdrive.
Thanks to strong exports, a better mix of models and robust European demand,
both firms have seen sales surge in the first three months of the year.
The persistent strength of the pound versus the euro has further fuelled
revenues at carmakers, which each realise just under 10 percent of their unit
sales in the UK.
The euro slumped nearly four percent against the pound in the first quarter
of 2000 and has slipped another three percent since the end of the quarter.
``For both companies the pound has been a major positive factor,'' said Gavin
Launder, auto analyst at SBC Warburg. ``It doesn't necessarily mean that
they're selling more cars in the UK, but the revenues they take home on those
cars are higher.''
Renault said on Friday that first quarter revenues rose 11.5 percent to 10.5
billion euros ($9.55 billion). On a like-for-like basis, this rise was an
even stronger 14.1 percent.
Domestic rival PSA saw even greater gains, reporting on Tuesday that sales
leapt 27.1 percent to 11.6 billion euros in the first three months of the
year. Under constant exchange rates and structure, the increase was 24.3
percent.
A day after a survey compiled by PricewaterhouseCoopers and Automotive News
Europe showed that PSA and Renault ranked number one and four, respectively,
among European carmakers in delivering returns to shareholders over the past
year, the stock of both companies posted strong gains.
Renault shares, which have risen 28 percent since hitting a recent low of 38
euros on March 10, ended the day up 3.41 percent at 50 euros. PSA shares rose
2.06 percent to 227.6 euros.
IMPLIED UNIT REVENUES ENCOURAGING
The rise in revenues at both manufacturers outpaced the increase in unit
sales -- a sign that Renault and PSA are having success in selling their
newer, higher priced cars.
``When you look at implied unit revenues it's very positive, particularly for
Renault which is viewed as past their model-cycle peak,'' said one
London-based analyst. ``It indicates their model mix is richer.''
Renault pointed to the success of its Megane Scenic model, whose new phase 2
format has been on sale since August.
``The Renault Megane, which ranked third among the top-selling passenger cars
in Western Europe last year, consolidated its position in the first three
months of 2000,'' the company said.
Sales at Renault's car division rose 11.4 percent, or 14.3 percent on a
like-for-like basis. Unit sales totalled 615,775 cars and light commercial
vehicles, up 5.5 percent from the first quarter in 1999.
Outside Western Europe, sales rose by more than 30 percent in the first
quarter, primarily due to a doubling of sales volumes in Turkey.
At PSA, car sales jumped 21.1 percent to 750,300 units in the first quarter,
with Europe, including France, registering gains of close to 18 percent and
unit sales in other countries rising an impressive 46.6 percent.
PSA said the Citroen Xsara Picasso, the futuristic mini-van which hit dealers
in January, was off to a good start.
But the 206, a popular compact model which was introduced near the end of
1998 and gained sales momentum as 1999 progressed, continued to be the main
driver of the dual-brand firm's revenues.
Analysts said they expected Peugeot's quarter-on-quarter comparisons to tail
off slightly as the year progressed because of the company's steady
improvement last year.
But stubbornly strong European demand is expected to maintain the sales
momentum at both firms.
``We should have some slowdown as the year progresses in terms of
comparables, but volumes should remain strong especially at Peugeot,'' said
Gaeten Toulemonde, auto analyst at Deutsche Bank in Paris.
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