Among European carmakers only the French showed a positive return in the third quarter.
PSA/Peugeot-Citroen and Renault have been top performers within the CAC 40 index of French blue chips since the start of the year and both had first-half results that exceeded analysts' expectations.
PSA shareholders' investments grew 8.4 percent in the third quarter. That's after first-half revenue grew 4.2 percent to E28.9 billion with the help of its lending arm Banque PSA Finance, its logistics unit GEFCO, and its auto components unit Faurecia.
Operating profit fell 17 percent to E1.07 million, reflecting declining car sales in some of PSA's core markets, most notably France.
The company said its aging lineup made it difficult to fight off competition. But PSA CEO Jean-Martin Folz predicts stronger sales in the second half. He is counting on the Peugeot 407 upper-medium car, launched this spring, and the Citroen C4 lower-medium car that debuted at the Paris auto show last month.
Investors have started anticipating a further revival of PSA's sales due to a slew of upcoming small-car launches. Cars coming to market within the next year include the Peugeot 1007 small minivan, which also debuted in Paris, plus the Peugeot 107 and Citroen C1 small-segment cars that will be built at PSA's joint assembly plant with Toyota in Kolin, Czech Republic.
Analysts say the array of small cars supports Folz's pledge that PSA will sell 4 million vehicles by 2006.
Renault returned 5.2 percent to investors in Q3. Investors hailed a tripling of operating profit in the first-half of 2004 to E1.2 billion. The increase showed that Renault was now drawing on its own strength rather than relying on contributions from its Japanese alliance partner Nissan to bolster profits.
Renault attributed the rise in profitability to cost cutting and a rising product mix.
After-tax net earnings climbed 28.5 percent to E1.5 billion with Nissan contributing E939 million and AB Volvo E124 million.
Renault owns 44.4 percent of Nissan and 20 percent of the Swedish truck maker.
Analysts say the "Ghosn factor" may also be pumping up Renault shares. Carlos Ghosn, the architect of Nissan's turnaround in the last five years, is due to replace Louis Schweitzer as Renault's chief executive in May. Schweitzer will remain as nonexecutive chairman.
Fiat was last among Europe's carmakers when it comes to shareholder return, down 15.7 percent in the third quarter.
Sergio Marchionne, the new CEO of Fiat group, which owns Fiat Auto, says the auto division will return to profit in 2006, a year later than anticipated by the previous management.
Marchionne says Fiat Auto is suffering from "self-inflicted industrial complexity" and the absence of operational benchmarking against competitors.
A strike during the second quarter at its plant in Melfi, Italy, cost Fiat more than E50 million and 40,000 vehicles in lost production, the company says.
To rein in debt, Fiat group continued to shed assets. It sold Midas, a car service network in Europe and South America, for E47.5 million to French group Norauto. Fiat said the group would book a E24 million capital gain from the sale.