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Abu Dhabi, UAEThursday 13 December 2018

Peugeot maker PSA's sales soar along with revenues

PSA also reiterated its full-year market outlook and mid-term earnings goals for the PCD business after Opel-Vauxhall acquisition starts to pay off

<p>Covered cars a the stand of French car maker Peugeot at the Geneva International Motor Show 2018. The marque&#39;s owner, PSA, has had a stellar first quarter. Harold Cunningham/AFP</p>
Covered cars a the stand of French car maker Peugeot at the Geneva International Motor Show 2018. The marque's owner, PSA, has had a stellar first quarter. Harold Cunningham/AFP

French car maker PSA Group posted a 42 percent increase in first-quarter revenue, lifted by its acquisition of Opel-Vauxhall last year.

Group revenue rose to €18.18 billion (Dh93.09bn), the maker of Peugeot and Citroen cars said on Tuesday, as vehicle deliveries advanced 44 per cent.

The sales number fell short of the €18.35bn expected by analysts, based on the median estimate in an Inquiry Financial poll for Thomson Reuters.

The Peugeot, Citroen and DS (PCD) business, which excludes Opel-Vauxhall, posted a 13.3 per cent revenue gain to €10.21bn on a 6.6 per cent increase in deliveries, while inventory rose 12.3 per cent year-on-year to 438,000 vehicles.

PSA also reiterated its full-year market outlook and mid-term earnings goals for the PCD business.

On Monday, Bodo Ramelow, the premier of the German state of Thuringia said it is ready to offer assistance to Opel in order to keep the region's Eisenach plant open.

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The state could help with energy costs and property, he said, but added that it would only lend assistance if wage bargaining parties returned to the negotiating table.

It is unacceptable to use investment decisions to put the state of Thuringia "virtually under threat of blackmail", Mr Ramelow said.

Of the three states in which Opel produces in Germany, he added: "The three states won't allow themselves to be divided."

PSA last year paid General Motors $2.6bn for loss-making Opel and British sister brand Vauxhall and is now seeking to make savings.

Opel needs to cut personnel costs by up to 25 per cent to make German sites competitive, chief executive Michael Lohscheller told German weekly Bilanz.

Any investment in the German sites is conditional upon them becoming competitive. Opel has no plans to shut down a German factory and will honour existing collective wage bargaining agreements, Mr Lohscheller told the magazine.

In a separate interview with Automobilwoche, Mr Lohscheller said it would not be able to start production of a new model in Germany in the first half of 2018 because there was no settlement with labour representatives about how to make German sites more competitive.

The German car maker group's German works council on Monday insisted that Opel management was not honouring their side of the bargain.

"Lohscheller should tell the truth. The tariff agreements are not being adhered to in the product and project plans for factories and engineering," the companies works council said on Monday.