Opel parent company creates profit in corona crisis

Unlike some of its competitors, the French PSA group achieved stable results in the first half of the year. However, Opel boss Lohscheller warns of a second lockdown.

A PSA plant in Slovakia

Dhe Opel parent company Peugeot has remained in the profit zone despite a massive drop in sales. The adjusted operating profit of the group collapsed in the first half of the year by around 85 percent to 517 million euros, as the French automaker, which is before the merger with Fiat Chrysler, announced on Tuesday. Group sales fell by 34.5 percent to 25.1 billion euros in the same period.

The result proves the resilience of the group after six years of intensive work to increase agility and lower the breakeven point, said CEO Carlos Tavares. For the second half of the year he announced a “solid upswing”. PSA plans to complete its merger with Fiat Chrysler before the end of the first quarter of 2021, despite concerns from EU antitrust authorities.

Management cited savings and a positive product mix as the reasons for the stable performance compared to some of the competitors. Above all, this is due to a higher proportion of profitable urban SUVs, from which PSA earns well. The management reaffirmed the long-standing goal of an average operating return of at least 4.5 percent for the period 2019 to 2021.

PSA Intraday

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Opel boss Michael Lohscheller sees the corona crisis for the automotive industry and his company not yet over. A sustainable recovery of the meanwhile collapsed markets is uncertain, said the manager on Tuesday on the occasion of the presentation of the half-yearly figures of the parent company PSA. A second possible lockdown could bring the next significant slump in demand and lead to interruptions in supply chains.

Opel and its British sister brand Vauxhall contributed a good 110 million euros in operating profit in the first six months of 2020 despite Corona. However, only a good 266,000 cars of the two brands were sold in the half-year, the decline in sales of 53.1 percent was much more pronounced than for the other group brands.

Lohscheller announced that it would accelerate the restructuring of the automaker that was once taken over by General Motors. Difficult issues will also be tackled, including the new regulations on Opel company pensions, which are highly controversial with employee representatives. In addition, the strict CO2 targets of the European Union will be met and politicians will not be asked to relax the climate targets.