PSA Peugeot-Citroën production is being lifted in Europe temporarily to keep up with demand. Output will be lifted by 60,000 units until the end of August 2015, 10% up against its originally planned volumes.

The increase will affect all three of the automaker’s brands. Among the beneficiaries will be:

• Citroën’s C4 Cactus, which has exceeded its order tally with 30,000 having been received since January; output will be increased by 9,000 units.
• Peugeot will also increase production of the B-segment 208, B-SUV 2008, C-segment 308 and 308 SW estate.
• In addition, the DS brand will increase DS3 output at Poissy (France).
• The company added that there would also be an increase in light commercial vehicle (LCV) production.

To support this, there will be work schedule adjustments as well as the addition of temporary workers in some cases, which it said it was now able to enact thanks to the flexibility through its new work contracts with workers in France and other parts of Europe.

In order to meet these increased production levels, production at its engine and transmission sites in France, as well as foundries and its supplier network will also need to rise.

Outlook and significance for the rise in PSA Peugeot-Citroen production

PSA’s announcement coincides with a 3.4% year-on-year (y/y) increase in registrations during the first quarter of 2015, according to the latest European Automobile Manufacturers’ Association (ACEA) figures, but more importantly a 8.7% y/y gain in March alone.

Light commercial vehicle (LCV) registrations are also rising; the most recent data for vehicles registered in the EU released by ACEA show a 8.5% y/y gain during the first two months of the year.

Some of the key beneficiaries from this increase are its newest models, which continue to be of interest to more confident consumers:

• The Peugeot 2008 is capitalising on the strength of demand for B-SUVs, while the Peugeot 308 perhaps indicates the improvements over the first generation as well.
• The initial strength of the Citroën C4 Cactus also bodes well for this brand’s future direction, which will leverage a number of its key features.

Despite reducing the number of models in future, IHS Automotive expects that growth will come, although a substantial improvement may not be for a few years.

Having registered around 3.17 million units in 2014, we forecast sales reaching only 3.4 million units by 2020. Nevertheless, momentum is expected to continue to grow, with a peak of 3.8 million in 2022.