A Renault Captur automobile, produced by Renault SA, stands on display at the 83rd Geneva International Motor Show on March 5. (Bloomberg)
Europeans bought 335,480 small sport-utility vehicles last year. None of them were built by French automakers.
PSA Peugeot Citroen and Renault SA aim to change that with new models that they say will help them woo younger drivers ― and gain a foothold in a segment that has grown 45 percent since 2007 and that analysts expect to more than double by 2016.
At the Geneva Motor Show this week, Renault is showing the Captur, a multi-purpose vehicle that extends a design renewal that started with the new Clio compact. Peugeot is presenting in Geneva the 2008, a small SUV based on its 208 compact. Both cars are slated to hit European showrooms next month.
The Peugeot model has won praise from dealers, said Jean- Philippe Imparato, the company’s director of European commercial operations. “I have trust in the first reaction,” he said. “When guys say ‘Wow, it’s gonna work,’ you’re likely to sell them to the final customer.”
Both models fit into a category that the industry calls crossovers, vehicles that have the higher ride of an SUV but retain many features of cars such as a lower roofline. IHS Automotive expects Europeans to buy 478,159 such vehicles this year and forecasts the segment will exceed 800,000 units in the region by 2016.
The French automakers need the profit boost from SUVs, which typically offer higher margins than sedans. With its factories running at about 75 percent of capacity, Peugeot reported a 576 million-euro ($748 million) operating loss last year and spent an average of 200 million euros in cash per month in its automotive branch. At Renault, which says its French factories ran at 55 percent of capacity last year, sales have suffered from the economic downturn, especially in Spain and Italy.
Despite those woes, the French companies’ shares are doing well this year after losing half their value in 2012. Peugeot has climbed 21 percent, valuing it at 2.34 billion euros. Renault has surged 33 percent, giving it a market capitalization of 16 billion euros.
The two are the biggest gainers in 2013 on the eight-member Bloomberg European Autos Index. Volkswagen AG, Europe’s largest automaker, still towers over them, with a market capitalization of 76.1 billion euros.
The French SUV push is “better late than never,” said Florent Couvreur, an analyst CM-CIC Securities. “They should have made them more than five years ago.”
(Bloomberg)