PARIS - Helped by strong European sales, PSA/Peugeot-Citroen SA and Renault SA posted sharply higher profits in the first six months of the year.
Renault's global revenue climbed 5.6 percent, and PSA's rose 7.5 percent.
Profits rose even more. Renault's operating income totaled $1.2 billion, up 29 percent. And PSA's operating income was $887 million, up 25 percent.
For the full year, PSA is targeting an operating profit of $1.4 billion, up from $1.1 billion last year. Renault said it expects operating profits to exceed last year's $1.9 billion.
Renault and PSA are benefiting from strong car sales in Western Europe. For the first seven months of 1999, PSA sales rose 13.8 percent over last year, and Renault sales grew 12.2 percent.
Peugeot volume has been boosted by the success of the 206 supermini. Production is 2,500 a day, and sales are particularly strong in Germany and Spain.
Stock prices of both groups have risen. Investors appear to be encouraged by Renault's merger with Nissan, said an industry analyst.
'The deal with Nissan brings a dynamic element (to Renault),' said Patrice Solaro, an analyst at Julius Baer bank in Paris. 'The market is finding out that the deal will work.'
Solaro expects a drastic re-engineering of Nissan.
He said Peugeot is benefiting from its strong sales and profits in the first half.
'There is also a speculative element about a possible strategic move,' Solaro said, referring to talk of a possible link with DaimlerChrysler. That followed talks about sharing platform elements for a four-seat Smart model.