|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||19.08 - 19.49|
|52-week range||17.17 - 25.40|
|Beta (3Y monthly)||N/A|
|PE ratio (TTM)||5.69|
|Earnings date||24 Jul 2019|
|Forward dividend & yield||N/A (N/A)|
|1y target est||24.75|
BEIJING/PARIS (Reuters) - Peugeot maker PSA Group and partner Dongfeng Group have agreed to cut thousands of jobs in China and drop two of their four shared assembly plants, according to a document seen by Reuters, in a last-ditch bid to curb mounting losses as the world's largest auto market loses steam. Dongfeng Peugeot Citroen Automobiles (DPCA), the carmakers' joint venture based in Wuhan, central China, will halve its workforce to 4,000 as it closes one plant and sells another under plans agreed last month between PSA boss Carlos Tavares and Dongfeng Chairman Zhu Yanfeng, the document showed.
(Bloomberg Opinion) -- France SA’s romance with the Chinese car industry could be nearing its end.Dongfeng Motor Corp., a state-owned giant that runs joint ventures with PSA Group, Nissan Motor Co. and Honda Motor Co., is looking at options for its 12.2% stake in PSA including a sale or bond issuance backed by the stock, people familiar with the matter told Bloomberg News on Thursday.On purely financial terms, such a move makes a great deal of sense. Dongfeng bought the shares as part of a 2014 bailout of the maker of Peugeot and Citroen cars, brokered by the French government. That investment has done rather well: PSA has seen the third-best share performance in Bloomberg’s Global Automobile Valuation peer group over the past five years, after Geely Automobile Holdings Ltd. and Fiat Chrysler Automobiles NV. The 800 million euros ($897 million) Dongfeng spent at the time is now worth around 2.2 billion euros. On top of that, the operational ventures that underpinned the shareholding have seen better days. Listed subsidiary Dongfeng Motor Group Co.’s sales of Peugeot- and Citroen-branded cars fell by about half in the first six months from a year earlier and are running at less than a quarter of their level in 2015. In the key crossover SUV market, models like Citroen’s C5 Aircross and Peugeot’s 4008 have simply failed to catch fire against competition from Asian and domestic rivals.Unless there’s a serious pick-up in the second half, Dongfeng’s PSA production lines, dedicated to turning out as many as 600,000 vehicles a year, will be running at little better than 25% utilization – levels at which it should be hard for the business to make money. Losses at Dongfeng’s PSA venture were already running at the equivalent of $251 million in 2018; it would hardly be surprising if they were worse this year.Management in China clearly see little sign that sales are about to pick up. Dongfeng’s dealer network for PSA-branded cars shrank by almost 80% between 2015 and 2018, and now stands at just 666 outlets compared with 1,186 for Renault-Nissan marques. The showrooms that remain suffer low productivity, shifting an average of 400 PSA vehicles each in 2018 compared with 1,431 at Nissan outlets and 761 at Honda-branded locations. (For what it’s worth, Renault does even worse, on just 204 vehicles).There’s a more proximate issue, too. Cash has been looking a little tight for Dongfeng’s listed subsidiary of late, owing largely to a huge increase in working capital, two years of negative Ebit, and net debt of 2.15 billion euros that was running at 8.1 times Ebitda at the end of December. In the 2018 fiscal year, operating cash flows actually turned negative to the tune of about 1.25 billion euros, a relatively rare event for carmakers that aren’t in the grip of a financial crisis or corporate scandal.Dongfeng still has ample liquidity. Its ratio of short-term assets to short-term liabilities was 1.36 at the end of December, above the industry average. But China’s auto market is grim, with sales declining from a year earlier for 12 straight months even as the government ratchets up pressure to spend money on the switch to electric vehicles. Faced with such headwinds, 2.2 billion euros could come in handy.At present there’s no word that Dongfeng is planning to unwind the JV to manufacture PSA cars in China – but it would probably welcome such an outcome, especially if it could persuade its European affiliate to pay to take more control of the partnership in the manner of the deal last year between BMW AG and Brilliance China Automotive Holdings Ltd.Dongfeng’s partnerships with Nissan and Honda are clearly the better performers, and PSA may feel it needs more of a free hand to turn around its Chinese operation. If a sale of a strategic stake can help ease the path toward that happier outcome, both sides stand to benefit.To contact the author of this story: David Fickling at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Dongfeng Motor Corp. is exploring options for its $2.5 billion stake in Peugeot owner PSA Group including a potential divestment, people with knowledge of the matter said, as the companies grapple with a global slowdown in the automotive market.The Chinese state-owned manufacturer held talks in recent weeks with potential advisers about ways to monetize part or all of its 12.2% stake in the French carmaker, according to the people. As part of the strategic review, Dongfeng Motor has discussed possible transactions including a straight sale of PSA shares or issuing exchangeable bonds backed by PSA stock, they said.The funds would shore up Dongfeng Motor’s finances at a time when rivals are spending billions on electric vehicles and autonomous driving systems. The global car market is deteriorating as shifts in technology and weakening economic growth give consumers fewer reasons to go to the showroom. Traditional automakers are trying to fight back by slashing jobs and pursuing mergers and alliances.Dongfeng Motor, which has a local venture with PSA, plans to coordinate with the French carmaker if it decides to sell down so that it can preserve a good working relationship, the people said. Deliberations are at an early stage, and there’s no certainty they will lead to a deal, they said. The Chinese automaker may hold onto part of its PSA stake to potentially benefit from future industry consolidation, the people said.A disposal could upset the delicate balance between Dongfeng Motor, the French government and the Peugeot family, which each own 12.2% of the company. Dongfeng Motor acquired its holding -- paying 7.50 euros apiece -- as part of a 2014 bailout of the more-than-century-old carmaker that had fallen behind other mass market manufacturers. PSA and Dongfeng Motor also agreed to team up in China, giving the French automaker access to what has since become the world’s largest auto market.Shares of Dongfeng Motor Group Co., the state-owned automaker’s listed unit in Hong Kong, jumped as much as 7.2% in early Thursday trading. That’s the biggest intra-day gain since September 2018. PSA closed 0.8% lower at 19.80 euros in Paris on Wednesday. The stock is up about 6% this year.A representative for Dongfeng Motor said the company doesn’t have any information regarding the plan at the moment. Representatives for PSA, the Peugeot family and the French finance ministry declined to comment.China’s SlowdownIn China, PSA has failed to attract customers because of its outdated models and a lack of SUVs. That has contributed to a 60% decline in unit sales in Asia in the first half and left the Chinese facilities underused. Chief Executive Officer Carlos Tavares has said he’d consider making cars in China for the U.S. market. Renting out capacity is also among options to tackle the issue, Chief Financial Officer Philippe de Rovira has said.“Maybe Dongfeng also sees the risk to its investment” given PSA’s challenge to comply with stricter emission rules in Europe, said Demian Flowers, an analyst with Commerzbank. “Since there is no obvious buyer ready to step in, I don’t see how this can be a positive for PSA stock.”Underscoring the depressed state of the Chinese automotive market, Dongfeng Motor’s Hong Kong-listed unit saw second-half profit fall 30%, the most on record. The company is slated to disclose first-half results later this month. China’s largest carmaker, SAIC Motor Corp., is expected to see its annual sales to fall for the first time in at least 14 years.(Adds share performance of Dongfeng’s Hong Kong listed unit in sixth paragraph.)\--With assistance from Dong Lyu, Ania Nussbaum, Gregory Viscusi and Young-Sam Cho.To contact Bloomberg News staff for this story: Crystal Tse in Hong Kong at email@example.com;Manuel Baigorri in Hong Kong at firstname.lastname@example.org;Vinicy Chan in Hong Kong at email@example.com;Tian Ying in Beijing at firstname.lastname@example.org;Ruth David in London at email@example.comTo contact the editors responsible for this story: Fion Li at firstname.lastname@example.org, ;Young-Sam Cho at email@example.com, Amy Thomson, Kenneth WongFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Britain bought the fewest new cars since 2012 last month, an auto industry body said, blaming political and economic uncertainty as well as consumers' uncertainty about future environmental regulation. New car registrations in July dropped 4.1% year-on-year to 157,198, the lowest number for the month since 2012, while sales for the year to date were 3.5% lower at just over 1.4 million, the Society of Motor Manufacturers and Traders said. Sales of diesel-powered cars were down by more than a fifth, while petrol car volumes were stable and electric car sales were up strongly from a low base.
(Bloomberg Opinion) -- Boris Johnson has been the U.K.’s leader for only a week, but he and his “Brexit war cabinet” have achieved one milestone already: The pound has slumped to its lowest level against the U.S. dollar and the euro since 2017.The cause is Britain’s newfound eagerness to up the ante in its negotiations with the European Union, with Johnson refusing to even meet with EU leaders until they scrap the terms of his predecessor Theresa May’s Brexit deal. His “do-or-die” hardball strategy has been gleefully parroted by ministers such as the foreign secretary Dominic Raab, who say leaving without a deal would be an even better way to squeeze a trade deal out of “stubborn” Brussels and prove the naysayers wrong.In more normal times, the sight of a currency selloff greeting a new Conservative government – led by someone who promised to be the “most pro-business prime minister” in history – might lead to a rethink. But we know Johnson doesn’t worry much about big market moves: “The pound goes up, the pound goes down,” he once said.We also know that some Brexiters see weak sterling as a good thing. The former Brexit Secretary David Davis said back in February that forecasts of a 20% currency fall in the event of no deal were something to cheer: “Our goods will become 20% more competitive on the global market.” Robert Halfon, a Conservative member of Parliament, added this week that “hopefully holidaymakers will choose GB as a holiday destination.”There’s a dangerous and deceptive optimism at work here. Beyond the usual dismissal of any criticism of Brexit as “Project Fear,” there’s clearly a belief among some that threatening no deal is kind of a free hit: It can depreciate the pound, boost British exports and heap pressure on Brussels in one swoop. This is playing with fire.While it’s true that the trade-weighted sterling fall of 15% since the referendum means a theoretical knock-on effect on goods export prices, that might matter less than the Brexiters think. Johnson and Raab need to reflect more carefully on the chief reason investors are dumping the pound: The anticipated negative impact of breaking from the EU (something that gets worse the harder the prospective rupture looks). And this impact almost certainly means a less attractive and more costly environment for exporters, whether that’s via new tariffs, regulatory barriers or lower productivity growth.So rather than merely inciting companies to invest more in the U.K. and export to the world, the currency drop also signals the risks of doing so. That’s why U.K. business investment is lagging the G7, according to Bloomberg Intelligence, while data from EY shows more foreign investment projects are being delayed.Instead of dismissing businesses’ fears of a no-deal Brexit as “unbalanced,” Raab should listen to CEOs such as Carlos Tavares of Peugeot SA. In an FT interview, Tavares said he might have to pull production from the carmaker’s Cheshire plant and shift it to the continent if the post-Brexit economics didn’t work. The site exports most of its output to Europe and imports most of its parts; what Tavares wants isn’t a weaker pound but the visibility on customs charges that a no-deal scenario doesn’t give him. Try telling a carmaker it should cheer a depressed sterling when EU car import tariffs are 10% and a single component can cross the English Channel three times.As Tavares can attest, imports are an equally important part of the trade picture. Yet the more Panglossian Brexiters are ignoring the fact that a weakening currency makes them pricier. And this isn’t just about protecting parts-importing manufacturers. Britain sources half of what it eats from abroad, so it’s a little unwise politically to dismiss the threat.The U.K.’s risk of runaway inflation is pretty low right now, judging by Bank of England data and market forecasts, but we’ve seen bouts of consumer price rises since the referendum. The country’s real household disposable income has shrunk an estimated 0.3 percent on average between 2016 and 2019, according to the Resolution Foundation. Brexit is already making the U.K. worse off. The falling pound won’t help.To contact the author of this story: Lionel Laurent at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
British Prime Minister Boris Johnson has told EU leaders he will sit down for Brexit talks when they indicate that they are ready to shift position on the divorce deal, otherwise Britain will prepare for leaving without an agreement, his spokeswoman said. "The PM has been setting out to European leaders the position ... that the Withdrawal Agreement with the backstop has not been able to pass parliament on the three occasions it was put in front of parliament. "The prime minister would be happy to sit down when that position changes.
Volkswagen Group shares rose 2% after the carmaker posted a 30% rise in second-quarter operating profit despite a drop in vehicle sales as rising demand for sports utility vehicles and premium brands boosted margins. Volkswagen bucked a trend of falling demand for passenger cars by launching a range of higher-margin sports utility vehicles at a time when demand for sedans is falling.
* European shares dip from 2-week highs, STOXX down 0.2% * Euro zone business growth stalls in July, outlook darkens * Earnings in focus in Europe and U.S. ahead of ECB meeting * Deutsche Bank posts 3.15 bln euro Q2 loss, shares fall * Chips rally after ASMI, Texas Instruments results * Signs of progress in trade talks support Asian shares Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Danilo Masoni. Consensus is for the ECB to cut its deposit rate in September and while today's data may not be enough for immediate action it will surely give more ammunition to the doves. Vailati says he still expects a rate cut along with a relaunch of QE in September when the ECB is due to update its macro forecasts.
* European shares open little changed * Earnings in focus in Europe and U.S. * Deutsche Bank posts 3.15 bln euro Q2 loss, shares fall * Eyes on PMIs ahead of tomorrow's ECB meeting * Signs of progress in trade talks support Asian shares * Chips rally after ASMI, Texas Instruments results Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on Messenger to share your thoughts on market moves: firstname.lastname@example.org STOXX STEADY, DB DOWN, ASMI ADDS SHINE TO CHIPS, ITV TOP GAINER (0732 GMT) The pan-European STOXX 600 benchmark is managing to hold near the over two-week highs hit in the previous session, trading just about flat as investors digest a deluge of earnings.
French carmaker PSA Group delivered a sharp increase in first-half profit, defying a global industry downturn as new models and cost savings from the integration of Opel-Vauxhall more than made up for weaker emerging market sales. Standing out against profit warnings from peers such as Daimler, PSA said on Wednesday its efficiency drive produced a 10.6% operating income gain even as deliveries went the other way - with a 12.8% decline posted earlier this month. The recurring operating income came in at 3.34 billion euros, with net income up by almost a quarter to 1.832 billion as revenue slid 0.7% to 38.3 billion.
Luxury carmaker Daimler said it would intensify cost cuts after legal risks for diesel-related issues and the cost of replacing Takata airbags triggered a 1.56 billion euros ($1.74 billion) loss before interest and taxes in the second quarter. The company reduced its sales outlook for Mercedes-Benz cars and said 4.2 billion euros in one-off expenses hit earnings, mainly at the cars and vans divisions, contributing to an operating loss at group level, compared with a 2.6 billion profit in the second quarter last year. Daimler pledged to cut costs in response but provided few details under new Chief Executive Ola Kaellenius, who took up the top job two months ago.
French carmaker Peugeot said it would be looking to take up the formal legal status of being a European company, which it said would better reflect the business and the integration of the Opel/Vauxhall businesses. "This business structure, used by a growing number of companies in Europe, is recognised in all member states of the European Union. It would reflect Groupe PSA's European scope, following the successful integration of Opel/Vauxhall," Peugeot said in a statement.
Despite Jean-Éric Vergne back to back world championship, the 2018-2019 Formula E season was especially exciting, resulting in a season that had 8 different winners over the span of 13 races. And while exciting is good for motorsports, that’s not the only reason why big manufacturers and brands spend small fortunes to compete in, and sponsor, motorsports.
(Bloomberg Opinion) -- Car launches are 10-a-penny so it’s very rare that a particular model’s demise captures the world’s attention. The Volkswagen Beetle, the last of which rolled off the production line in Mexico this week, was no ordinary vehicle though.The downfall of the “People’s Car,” an icon of post-war German prosperity as well as the 1960s counterculture, is all the more painful because of what’s replacing it. Bloomberg News reported this week that the Mexican plant is now gearing up to build – wait for it – a compact sports utility vehicle.With all due respect to VW’s new SUV, I doubt it’s going to capture hearts the way the “Love Bug” did, not to mention the original tiny Fiat 500 or Britain’s Mini for that matter. Petite, fuel-efficient cars would seem to be an obvious solution for a warming planet and our increasingly crowded cities. Yet they’re fast becoming an endangered species in western markets. Consumers have voted with their wallets by buying SUVs and because they carry fatter profit margins, carmakers have been happy to oblige. VW’s famous entreaty to Beetle customers to “think small” hasn’t worked out. But killing the affordable small car could yet have adverse consequences for the auto industry – as well as the environment. At their best, they marry affordability and utilitarian styling and they can be outrageously good fun to drive. In a recent “research” video report for clients, the Bernstein analyst Max Warburton borrowed a vintage 1.9 liter Peugeot 205 GTI – a racy version of the French bestseller. His boyish delight at getting behind the wheel was palpable.Compact cars have always struggled to gain traction with Americans, though, and they’ve been overshadowed recently by the boom in trucks and SUVs, which account for almost 70% of the U.S. market. Cheap credit and leasing have made larger vehicles more affordable; the average purchase price of a new car has risen to an eye-watering $37,000. And low gas prices make these heavyweights less costly to run. In fairness, some compact SUVs are actually pretty fuel efficient, so even a big rise in pump prices might not reverse this trend.Plus there’s the safety factor, which compels even people who don’t like SUVs to buy one in case they get into an accident with another giant vehicle. Pedestrians are more likely to be killed if they’re hit by a large SUV, but that’s apparently of little concern.In Europe, where small cars still account for about one-third of the market, there’s another (counter-intuitive) factor working against compact models: Tougher emissions standards. By 2021 carmakers must achieve average fleet emissions of 95g CO2/km. Targets for 2025 and 2030 are even more stringent.The problem, car executives say, is that the high cost of electrification technology is difficult to combine with the economics of smaller, cheaper cars. Installing emissions-cutting kit in a compact car requires either a prohibitively high sticker price or the sacrifice of profit margins. Perversely, it can be cheaper for carmakers not to bother and just pay the regulatory fine.Hence several entry-level models might be facing the chop, at least until the cost of batteries falls. VW’s CEO Herbert Diess said recently that his company’s smallest vehicles, the Up! and Polo, are “really under threat.” Meanwhile, Peugeot SA’s Opel/Vauxhall has already announced that its Adam and Karl city cars face the ax.From a profit and regulatory compliance perspective, it’s certainly better for carmakers to sell lots of hybrid SUVs and high-performance sports cars. But is this better for the environment? That’s debatable.Some hybrids still emit lots of CO2 when driven distances that exceed their very limited electric-only range, and that’s not their only drawback. “The problem with plug-in hybrids is that consumers don’t plug them in,” says Bernstein’s Warburton.One sad consequence of these trends is that there will be fewer new vehicles on the market that poorer or younger customers can afford to buy and insure. While they’ll be able to buy second-hand still, a dearth of cheap models may turn even more people off the idea of car ownership.Car-sharing, bike-sharing and electric scooters have already persuaded many young city dwellers that there are better alternatives; the average age of a new car buyer in Germany has risen to 53. SUVs have killed the small affordable vehicle. But big, self-owned cars face their own struggles.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Profit warnings are never pleasant but few are as comprehensively horrible as the one Daimler AG served up on Friday. If the German car giant’s intention was to convince the investment community that it doesn’t have a grip on its business or earnings forecasts, then well played. Mission accomplished.Usually a warning that spans product recall costs, legal issues, production delays and weak demand might be excused as “kitchen-sinking” (getting all of your bad news out at once). Ola Kaellenius took over as chief executive from Dieter Zetsche in May and a change at the top is often a good moment to reset investor expectations.But this is Daimler’s fourth profit warning in barely 12 months, and the last one came less than three weeks ago. It had already chucked out the kitchen sink; now’s it’s moved on to tearing out the plumbing. On top of the problems disclosed by Daimler in the last warning, the company has now revealed several massive new burdens on earnings, which are related chiefly to the fallout from allegations of emissions tampering in diesel cars. I wrote before about the legal risks that Daimler faces. The upshot is that the German giant made a 1.6 billion euro ($1.8 billion) operating loss in the second quarter and full-year profit is now expected to be “significantly” below last year’s. The Mercedes-Benz division will probably eke out a return on sales of just 4% this year (the midpoint of its expected range). For a premium auto manufacturer, that’s abysmal. The French mass-market carmaker Peugeot SA achieved double that recently. Oddly, Daimler shares gave up less than 1 billion euros of market value on Friday, which suggests investors were expecting more bad news. Also, some of the new problems are one-offs. Still, the fall propelled Daimler’s dividend yield – the last dividend divided by the share price – toward 7%. That’s not a sign of faith from the markets.Daimler distributed 40% of its net profit to shareholders last year, which means it paid out almost 3.5 billion euros. It’s reasonable to assume 2019’s net profit will be lower than last year and that the dividend will be too. The Bloomberg Dividend Forecast anticipates a payout of 2.65 euros a share, a cut of almost one-fifth. With Daimler’s cash flow under severe pressure, even that looks generous. To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
In February 2019, Peugeot S.A. (EPA:UG) announced its latest earnings update, which indicated that the company...