New car maintenance and guarantee rules
French car sales plummet as Peugeot-GM disappoints risk.
New car sales in France fell by an annualized rate of 20 2 percent in February, industry data showed Thursday, with the worst falls recorded by PSA Peugeot Citroen whose announced tie up with General Motors pushed shares PSA down.
The rating agency Moody's downgraded the PSA group one notch to non-investment status, warning that similar alliances in the auto industry have often failed to meet expectations.
Moody's slapped Peugeot with a Ba3 rating and a negative outlook based on poor earnings while adding that previous mergers and alliances have often resulted in the anticipated competitive advantage and improved performance.
Sales in February by Peugeot plummeted 29 percent 2 while fellow French carmaker Renault saw its sales fall 28 percent 5.
The sharp decline is largely explained by strong sales a year earlier fueled by a system in cash at the French case as new car purchases subsidized to boost the auto sector.
Sales in February by foreign automakers were stronger, falling only July 3 percent overall with some companies, such as Japan Nissan, German BMW of Germany and Hyundai in South Korea, showing growth.
But sales of General Motors fell 25 percent to 7.819 7 cars.
The decline in new car registrations should continue in March, CCFA has custody and the committee has scheduled a total market contraction of between 7 and 10 percent this year.
Wednesday GM and Peugeot - number two automaker in Europe - said they would form a global partnership with GM taking a seven percent stake in the French company with a reported one billion euro capital increase.
The two companies have agreed to share platforms of vehicles and create a joint venture to purchase commodities and other goods and services targeted 2 billion1 5 billion euros in annual savings within five years from the 'alliance.
The share price Peugeot sank more than 5 0 percent Thursday in a Paris market largely flat with traders focused on the capital increase caused by the company instead of all potential synergies.
The share price is suffering because of the capital increase will dilute shares and traders ignore the good news for now, Deutsche Bank analyst Gaeten Toulemonde said.
Car manufacturers have struggled with sales in Europe tracking of offenders, where the debt crisis in the eurozone caused the recession and the sharp slowdown in demand for cars.
Thousands of workers of a Peugeot factory north of Paris were temporarily laid off this week as the company looks to avoid stockpiling as demand decreases.
Hundreds of workers of a Renault factory west of Paris meanwhile marched and blocked traffic on Wednesday demanding salary increases, but Renault said its hands were tied by the deteriorating market for automobile.
French car sales lead disappoint risk PeugeotGM, French, sales, lead company.