Economy, Auto
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Iran Contributes to PSA Group’s Q3 Rebound

Iran Khodro chief Hashem Yekkezare, left, and the chairman of the managing board of Peugeot Citroen PSA Carlos TavaresIran Khodro chief Hashem Yekkezare, left, and the chairman of the managing board of Peugeot Citroen PSA Carlos Tavares

European automakers and third-party manufacturers rebounded in the third quarter after six months of decline. An increase in trade with Iran has helped certain French brands see a large uptick in their sales overall, according to ANE-PricewaterhouseCoopers’ latest report. 

All major European publicly traded manufacturers have seen their growth increase considerably, according to the report with an 11.3% rise in shareholder value after declines of 12.4% in the first quarter and 13.1% decline in the second quarter. 

PSA Group was the automaker that made the biggest improvement in the third quarter. The French company recorded a 25.7% gain in shareholder value compared with a 28.2% dip in the preceding quarter and a 7.1% decline in the three months before that.

In Q3 PSA revealed that despite a slight drop in sales, its cost-cutting efforts and the decision to stop production of less popular models helped lift its operating margin in the first six months above 6%. It also revealed progress in reducing its level of dependence on Europe for sales.

Iran has been the biggest contributor to the French company’s profit margins. This follows PSA and Iran’s SAIPA agreement to create a 50-50 joint venture to produce and sell Citroens in the country.

The partners will invest more than €300 million in manufacturing and R&D capacity over the next five years. PSA and its other local partner Iranian partner Iran Khodro (the country’s largest producer) also agreed to a €400 million deal to build 200,000 Peugeots a year by 2018. 

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