French carmaker PSA posts sales gain despite Iran withdrawal

Deliveries rose to 2.18 million vehicles, up 38 percent thanks to PSA’s purchase of Opel-Vauxhall from General Motors last year. (Reuters)
Updated 12 July 2018
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French carmaker PSA posts sales gain despite Iran withdrawal

PARIS: France’s PSA Group said its global sales had continued to grow in the first half despite its withdrawal from Iran, a major market for the maker of Peugeot and Citroen cars.
Deliveries rose to 2.18 million vehicles, up 38 percent thanks to PSA’s purchase of Opel-Vauxhall from General Motors last year. Excluding the newly acquired brands, sales rose 1.9 percent globally and 8.4 percent in Europe.
But Middle East sales by the French brands fell 26 percent, the group said, reflecting the deconsolidation of Iran from May 1 under the threat of US sanctions. Iran had accounted for more than 12 percent of group sales last year.
Under a succession of CEOs, PSA has sought for years to expand beyond Europe. But the Iran withdrawal and Opel deal have increased dependence on its home region, which claimed 77 percent global deliveries, up from 66 percent a year earlier.
“We’re not global enough, but at the same time we’re less exposed to the tariff barriers that can spring up here and there,” PSA Europe chief Maxime Picat said on Thursday.
In the current climate of mounting trade tensions, he told reporters on a call that a high domestic sales concentration was “almost becoming a strength.”
PSA sees no reason to modify its full-year outlook for a “stable” European market, Picat added. The group is due to publish first-half financial results on July 24.


US-China trade war to weigh on South Korean economy

Updated 18 July 2018
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US-China trade war to weigh on South Korean economy

  • The South Korean economy is expected to grow 2.9 percent this year, lower than an earlier estimate of three percent
  • The International Monetary Fund said this week the growing trade confrontation is the ‘greatest near-term threat to global growth’

SEOUL: South Korea’s finance minister warned that an all-out trade war between the US and China would have grim implications for the country, as he lowered this year’s growth outlook Wednesday.
The world’s 11th largest economy is expected to grow 2.9 percent this year, lower than an earlier estimate of three percent, Kim Dong-yeon said, citing slowing demand at home and abroad as well as rising unemployment.
The latest estimate is also lower than last year’s figures, when the export-reliant economy expanded 3.1 percent, and comes as the South’s top two trading partners China and the US engage in a bitter spat that has seen them impose hefty tariffs on billions of dollars in goods.
“The economic situation down the road does not seem to be bright,” Kim told reporters.
“The situation may get worse if anxiety in the international financial markets spreads due to the US-China trade dispute... and market and corporate sentiment does not improve,” he said.
Overseas shipments account for more than half of the South’s economy, with more than a quarter of exports shipped to China and about 12 percent to the US.
Kim vowed to “closely monitor international trade situations including the US-China trade row” and announced measures to encourage job creation and spur domestic spending.
US President Donald Trump has taken a confrontational “America First” stance on trade policy, imposing steep tariffs on steel and aluminum, which angered allies and prompted swift retaliation, as well as 25 percent duties on $34 billion of Chinese goods, with more on the way.
China has matched US tariffs dollar-for-dollar and threatened to take further measures, while US exports face retaliatory border taxes from Canada, Mexico and the European Union.
The International Monetary Fund said this week the growing trade confrontation is the “greatest near-term threat to global growth” and in the worst case could cut a half point off world GDP.