, PARIS, October 22- Peugeot Citroen on Wednesday said sales in China surged by almost half in the third quarter, keeping the French auto group on the road to meet annual targets under its turnaround plan.
Europe’s second largest carmaker is pinning much of its recovery strategy on a tie up agreed this year with Chinese group Dongfeng and on another Chinese venture.
Peugeot’s third quarter sales in China, the biggest auto market in the world, leapt by 44.4 percent. Its market share widened by 0.7 percentage points to 4.4 percent.
The biggest underlying factor behind the group’s global revenue was growth in its auto parts subsidiary Faurecia.
Total group sales in terms of vehicle volume rose by 5.4 percent, but sales in some markets plunged.
Shares in the PSA Peugeot Citroen group were showing a gain of 0.74 percent percent to 9.435 euros in mid-day trading, down from an initial gain of 2.51 percent.
Group turnover edged up just 1.6 percent to 12.29 billion euros ($15.6 billion euros).
Chief executive Carlos Tavares said the recovery plan was beginning to produce results but that “the road back to a full recovery is still long”.
The group held to its main targets under his turnaround plan called “Back in the Race,” designed to revive its fortunes after two years of severe financial difficulties.
Sales by Peugeot Citroen in the European market, slowly recovering after five years of downturn, rose 7.0 percent.
PSA, ranking second in Europe after the giant German VW group, is trying to accelerate expansion into emerging markets in a bid to diversify beyond the bleak European car market.
PSA said that it expected the European market to grow this year by 4.0-5.0 percent, and the Chinese market by about 1.0 percent.
France is home to two major car part makers in global terms. The other big French auto parts maker Valeo reported a 10.0-percent jump in quarterly sales and its shares surged by 3.32 percent to 87.86 euros.
But in the region which PSA group describes as Eurasia, sales plunged by 62.4 percent against the backdrop of the crisis in Ukraine and sanctions against Russia.
Sales in South America fell by 38.2 percent owing to difficult economic conditions in Argentina and Brazil, while in the Middle East and Africa, they fell by 11.3 percent.
The group said that on these markets it would it was working to rationalise its fixed costs and to adjust the range of vehicles on offer with the aim of breaking even in financial terms in 2017.
The figures from Faurecia showed the importance of this parts division. Its sales grew by 6.5 percent to 4.36 billion euros. Meanwhile sales by the PSA auto making division fell by 0.8 percent to 7.97 billion euros.
In Latin America, it expected the market to shrink by about 10.0 percent and in Russia by about 15.0 percent.