July 12, 2018 / 5:37 AM / 9 days ago

French carmaker PSA posts sales gain despite Iran withdrawal

PARIS (Reuters) - France’s PSA Group (PEUP.PA) said its global sales had continued to grow in the first half despite its withdrawal from Iran, a major market for the maker of Peugeot and Citroen cars.

The PSA Group logo is pictured during a news conference to announce the company's 2017 annual results at their headquarter in Rueil-Malmaison, near Paris, France, March 1, 2018. REUTERS/Benoit Tessier

Deliveries rose to 2.18 million vehicles, up 38 percent thanks to PSA’s purchase of Opel-Vauxhall from General Motors (GM.N) last year. Excluding the newly acquired brands, sales rose 1.9 percent globally and 8.4 percent in Europe.

But Middle East sales by the French brands fell 26 percent, the group said, reflecting the deconsolidation of Iran from May 1 under the threat of U.S. sanctions. Iran had accounted for more than 12 percent of group sales last year.

Under a succession of CEOs, PSA has sought for years to expand beyond Europe. But the Iran withdrawal and Opel deal have increased dependence on its home region, which claimed 77 percent global deliveries, up from 66 percent a year earlier.

“We’re not global enough, but at the same time we’re less exposed to the tariff barriers that can spring up here and there,” PSA Europe chief Maxime Picat said on Thursday.

In the current climate of mounting trade tensions, he told reporters on a call that a high domestic sales concentration was “almost becoming a strength”.

PSA sees no reason to modify its full-year outlook for a “stable” European market, Picat added. The group is due to publish first-half financial results on July 24.

Reporting by Laurence Frost and Gilles Guillaume; Editing by Sudip Kar-Gupta

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