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Peugeot-Citroen, Mercedes boost 2007 vehicle sales

PARIS/FRANKFURT - French volume carmaker PSA Peugeot Citroen and German luxury brand Mercedes posted small increases in 2007 vehicle sales, in a sector spooked by fears that a recession could stifle demand this year.

PSA, Europe’s second-biggest carmaker after Volkswagen, said on Tuesday its vehicle sales -- passenger cars and vans -- rose 3.8 percent to 3,233,00 units. The figures were helped by its first improvement in western Europe for five years, as new models such as the Peugeot 207 compact car and the roomy Citroen C4 Picasso multi-purpose vehicle boosted sales.

Daimler, fresh from divorcing American brand Chrysler which it sold to Cerberus Capital Management LP, said it posted a sales record for its Mercedes-Benz brand in 2007, up 3.2 percent to 1.19 million, while sales of the Maybach super-luxury limousines were steady at 400 cars.

For the Smart small cars, however, there was a decline of 10.3 percent as it pared production to one model only, the two- seater fortwo.

While European auto stocks have fallen recently with the DJ Stoxx Auto Index down 24 percent from a high in November, sector analysts said the outlook for 2008 volumes was stable.

‘I think the feature of 2007 will be much the same in 2008, and this is emerging markets offsetting the weakness elsewhere,’ said Michael Tyndall at Nomura. ‘I am broadly optimistic about the outlook for volumes in 2008 if not largely because emerging markets don’t look like they will slow down at all,’ he added.

Suvs

Mercedes was boosted by the new version of the C-Class mainstream model and by strong sales of big Sports Utility Vehicles (SUV) of which it plans to bring out a new model.

‘In 2007 we succeeded in laying the groundwork for sustainable, profitable growth, particularly with the market launches of the new Mercedes-Benz C-Class and the new Smart fortwo,’ Chief Executive Dieter Zetsche said in a statement.

While Mercedes cars risk being hurt by relatively high planned European Union CO2 emission levies on new cars, due to their powerful engines, Zetsche said that the small Smarts could sell well in the US on their green credentials.

‘The growing interest of American customers for fuel-efficient vehicles provides an ideal backdrop for Smart’s market entry to the world’s biggest car market,’ the company said, noting 75,000 people had signed up for information and test drives as it readies the launch there.

At the Detroit Motor Show, Zetsche will unveil a new Sports Utility Vehicle called the Vision GLK Freeside.

Clean cars

Peugeot Citroen said it expected to sell about 5 percent more finished vehicles and vehicle kits in 2008, with stronger growth in the second half than in the first, while the main European market was seen remaining stable and competitive.

The group is in the first year of a plan drawn up by new Chief Executive Christian Streiff to boost profit margins to 5.5-6 percent by 2010 against 2.0 percent in 2006.

The 2007 results are due on Feb. 13 and the firm, in which the Peugeot family still holds a stake of over 30 percent, has said it aimed to beat the 2006 margin figure which was the lowest since 1997.

The new models from 2007, including the C-Crosser and Peugeot 2007 SUVs assembled by Mitsubishi Motors Corp, were already in the works before Streiff arrived.

But he decided to accelerate launches and bring out more models including cars tailored for fast-growing emerging markets such as South America and China.

PSA last month decided to build a production site in Kaluga, Russia.

PSA said that for the second time, it sold more than 1 million vehicles with a CO2 emission of less than the key 140 grammes per kilometre, of which 750,000 had emissions less than 130 grammes, which made it market leader for low-emission vehicles with a share of 26 percent. The overall European market share was stable at 13.8 percent.

On Friday, Renault reported a 2.2 percent 2007 volume rise.