21 October 2012

Peugeot and Citroen retailers could find access to competitive finance offers increasingly difficult as the PSA group’s bank faces a financial downgrade.

If Banque PSA, the Peugeot Citroen group’s finance arm, has its credit rating further downgraded it will make borrowing more difficult and more expensive.
According to the Financial Times, the French government is currently talking to PSA about a deal to support the bank.

A Banque PSA official that Auto Retail Network spoke to said that any changes would only impact new financing. However, the spokesman added: ‘That won’t be a problem because we have a solution, but we aren’t ready to announce anything at the moment.’

In a statement to the FT, the bank said: ‘PSA Peugeot Citroen’s management is examining various options aimed at the implementation of solutions permitting Banque PSA to provide both its end customers and distributor network with a level of financing sufficient to ensure the continued smooth functioning of the whole automotive sector and Group PSA.’

If the credit rating downgrade goes ahead, it mean fewer competitive retail finance offers which have driven sales in the UK this year.

Vertu boss Robert Forrester this week said the UK car market was under pressure to take an increased volume from Europe.

Commenting after Vertu announced better than expected interim results, he said: ‘I have a working hypothesis that with the value of the £ rising against the Euro, more cars are coming to the UK. That’s great, but what’s not happened is that the exchange rate gain is reaching retailers. Manufacturers are hanging on to it. Volumes are increasing but not margins.

‘Manufacturers are spending the FX gain money on consumer offers, not on the dealer margin. ‘And to be honest, that’s what I’d do in their situation.’

Tags: Citreon, Dealers, finance, franchises, Peugeot, PSA Banque, Retailers