Europe earnings: auto sector hit by slower sales

REUTERS: Slower sales have hit automakers including Daimler and Renault, while a withdrawal from Iran by PSA Group and Renault is also having a negative impact on first-quarter revenues.

Sliding sales meant a slew of gloomy numbers for the auto industry. Daimler’s first quarter operating profits fell 16 percent, it said on Friday — hit by a decline in deliveries and the rising cost of developing new models.

Costs for a production delay for its Mercedes-Benz GLE have had an impact.And Mercedes sales in China, the world’s largest car market, fell 3 per cent.

Like other car makers, Daimler is also battling slower sales in the US and Europe. Renault posted a 4.8 per cent drop in first-quarter revenue — also hit by a decline in overseas sales.

Global deliveries were down 5.6 per cent, weighed down by the company’s withdrawal from Iran last year.

It was a similar picture at Peugeot maker PSA group. A 1.1 percent decline in first-quarter revenue was down to lacklustre sales – again compounded by the car maker’s withdrawal from Iran.

And automotive supplier Continental has also been hit by the downturn in demand. It said on Friday it was pushing back the spin-off of its powertrain division to next year after a 17 percent drop in first-quarter operating profit.

French car parts company Valeo provided the only bright spot.Shares rose 3 per cent as investors welcomed its statement that performance would improve in the second half of the year.

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