French July Car Sales Up 0.9%; Is This a Sign of Stabilization? image

Auto sales in France increased 0.9% in July, a sign that demand might begin to stabilize in one of the worst affected regions by the slump in Europe.

New vehicle registrations in July increased to 150,248 units, according to CCFA industry association (Comité des Constructeurs Français d’Automobiles), with both PSA Peugeot Citroen and Renault reporting positive sales. The increase was also due to one extra day of sales compared with July 2012 and contrasts with the 9.7% drop in auto sales in France so far this year.

Data from last month shows that the French auto market begins to stabilize. Still CCFA spokesman Francois Roudier said that the association keeps its forecast of an 8% drop for this year. PSA Peugeot Citroen has set a breakeven target for its plants in France by 2016, relying on competitiveness talks with labor unions.

PSA is trying to reach labor concessions with the labor unions in France, while it struggles to stem losses in Europe, which have hit 5 billion euro in 2012. The French automaker’s restructuring plan includes cutting 10,000 jobs and the closure of a plant near Paris, in an attempt to get back to positive cash flow by late 2014.

PSA Peugeot-Citroen said it plans to increase its 2008 small SUV production in France as the automaker received a higher-than-expected demand for the new vehicle. Peugeot plans to sell 200,000 2008 small SUV vehicles until 2015. 2008 is Peugeot’s first vehicle to be developed and engineered simultaneously by employees based in China, Europe and Latina America.

Source: Reuters