PARIS -- PSA Group reported a 5.1 percent drop in third-quarter revenue, hurt by plunging sales in China and a weaker European performance by its Peugeot and Citroen brands.
Revenue dropped to 11.4 billion euros ($12.4 billion) in the three months to Sept. 30 from 12.0 billion a year earlier, with negative currency effects only partly offset by price increases.
Analysts had expected 11.52 billion euros in revenue, based on the median of 10 estimates in an Inquiry Financial poll.
The revenue decline came despite a near-11 percent rise in deliveries to 2.23 million vehicles, as sales resumed in Iran. Peugeot registrations were up by a quarter, but Citroen's were down 7.4 percent. DS, the group's nascent premium brand, fell 30 percent, PSA said in a statement today.
Cost-cutting has returned PSA to healthy profitability since a 2014 state-backed bailout that pulled the group back from near-bankruptcy.
But a shift by Chinese consumers away from foreign mid-market brands poses an extra challenge to CEO Carlos Tavares's "Push to Pass" recovery plan.
Chief Financial Officer Jean-Baptiste de Chatillon told a conference call the group remained confident of achieving targets set in the plan despite a more challenging environment.
New models such as the Citroen C3 mini will boost sales volumes and revenue, starting in the current fourth quarter, De Chatillon said, with growth becoming "clearly visible" in 2017.
China sales fell 17 percent in the third quarter and 19 percent in the first nine months of the year, even as PSA raised its 2016 growth forecast for the world's biggest auto market to 15 percent.
But European deliveries, which had risen for all three brands in the first half, fell 4.3 percent to 368,000 vehicles in the last quarter, with Citroen down 6.9 percent. The new C3's arrival will help to reverse that slide, PSA said.
Weaker emerging-market currencies, particularly in Latin America, had a 4.7 percent negative impact on revenue, softened only partly by a 1.8 percent gain from price increases.