|Peugeot first half 2012 income falls due to Iran sanctions||
PSA Peugeot Citroen said in its ‘First Half 2012 Report’ that the group revenues down 5.1% year-on-year to €29.6 billion.
Europe's second-largest car maker posted a 662 million euro ($800 million) first-half loss in its auto division, dragging its group bottom line into the red - as it had warned earlier this month when announcing 8,000 French job cuts and a plant closure.
This slump primarily related to provisions for the group’s decreasing exports of automotive parts to Iran, the report noted.
According to the report, automotive division revenues down 10.5% in first half of 2012, in comparison to the first half of 2011.
Philippe Varin, Chairman of the PSA Peugeot Citroen Managing Board, said, “The Group is facing difficult times. The depth and persistence of the crisis impacting our business in Europe requires the launch of the reorganization of our French production base and a reduction in our structural costs. We have a clear understanding of how hard this project is for a large numbers of our employees, but it is our duty to ensure that it is carried out with an exemplary social dialogue.”
Unemployed autoworkers real losers in Peugeot-Iran row: Analyst
In February, the automaker decided to end relations with the Islamic Republic, losing the half-million vehicle sales Iran would have provided in 2012.
“Such a move, amid the European sovereign debt crisis and plummeting auto sales across the continent, seems like it could only be a disastrous business decision. And it is,” Ramin Mazaheri wrote in an article published on Press TV website.
Unable to replace the lucrative market, Peugeot was later forced to jettison 8,000 jobs to compensate for billions of euros it lost as a result, he noted.
Mazaheri dismissed the “strengthening of sanctions” against Iran and banking difficulties as the reasons behind the company’s decision.
“In exchange for selling seven percent of the company’s shares to General Motors, owned by the American government, the U.S. insisted that Peugeot should stop selling cars to Iran,” he explained.
The analyst further referred to Iran's policy of "economic protectionism," which has helped the country to produce more cars than Italy or the UK and become the world’s 12th largest auto manufacturer.
Peugeot’s pullout will not affect the Iranian car industry as Iran will now continue to partner with other auto companies and to "improve the quality of Iranian vehicles by importing car kits to be assembled in Iranian factories," according to Mazaheri.
"The 8,000 now-unemployed auto workers, as well as those who worked at the thousands of secondary jobs associated with the Peugeot plants” are the real victims of the company's decision, he concluded.
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|Last Updated on 29 July 2012 16:44|