PARIS (Reuters) – PSA Group’s Peugeot lineup will lead a return to the United States after an absence of almost three decades, as part of a drive to address the group’s dependence on Europe.

A PSA Group logo is seen behind a car displayed during French carmaker’s news conference as they announce the company’s 2018 results at their headquarters in Rueil-Malmaison, near Paris, France, February 26, 2019. REUTERS/Christian Hartmann

Europe now accounts for 80 percent of PSA’s global vehicle sales following the acquisition of General Motors’ Opel division in 2017.

The group last year opened a long-promised assault on the North American market with its Free2Move car-sharing operations in Seattle and Washington D.C. but the Peugeot brand relaunch will bring its first vehicle sales in the region since 1991.

The Citroen brand will also launch in India, while Opel returns to Russia in pursuit of a 50 percent group sales increase outside Europe by 2021, Chief Executive Carlos Tavares said – adding that the North American market would be supplied from plants in Europe and China.

Under Tavares, strong sales of the Peugeot 3008 and 5008 SUV models and the acquisition of Opel-Vauxhall have helped to build on PSA’s steady recovery from near-bankruptcy in 2013-14. On Tuesday it raised medium-term profit guidance and posted record full-year sales and earnings.

Sales rose 19 percent in 2018 from a year earlier to a record 74.03 billion but fell short of the 74.76 billion predicted by an Infront Data analyst poll.

The revenue miss knocked the French carmaker’s shares 3.3 percent lower at 1005 GMT, paring their 22 percent gain so far this year.

But recurring operating income beat expectations, jumping 43 percent to 5.69 billion euros for a 7.7 percent profit margin.

The performance “demonstrates the ability of our group to deliver a profitable and recurring growth”, Tavares said.

Paris-based PSA’s record earnings and confident tone contrasted with domestic rival Renault, which reported lower 2018 sales and profit earlier this month.

After turning the French brands around, Tavares is now applying the same discipline to the Opel-Vauxhall division, which recorded a 4.7 percent margin on sales of 18.31 billion euros, its first full-year profit since 1999.

It also contributed positive cash flow of 1.35 billion euros towards the group’s 3.5 billion euros.

PSA said its 4.5 percent “all-weather” margin goal for 2019-2021 period would now include less profitable Opel unit, effectively raising the benchmark.

Chief Financial Officer Philippe de Rovira said the conservative target covered the possible scenario in which Britain crashes out of the European Union in a no-deal “hard Brexit”, as well as other potential market setbacks.

The legacy Peugeot, Citroen and DS brands reported a record 8.4 percent margin, up 1.1 percentage point as stronger pricing and production cost savings overpowered currency and raw-material setbacks, while sales rose 18.9 percent.

PSA increased its dividend to a proposed 78 euro cents from last year’s 53 cents, while raising its payout ratio to 28 percent from 25 percent, starting in 2020.

($1 = 0.8805 euros)

Reporting by Laurence Frost; Editing by Sudip Kar-Gupta; Editing by Kirsten Donovan


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