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Revenues at Peugeot and Citroen owner PSA rose by 4.9 per cent to €13.6bn in the first quarter as higher sales from new and more expensive vehicles offset the negative impact of exchange rates.

Sales from its automotive division rose from €8.8bn to €9bn, beating analyst forecasts that it would slip to €8.79bn.

The group said higher revenues from new models boosted sales by 3.7 per cent, offsetting a 1 per cent fall from currency moves such as the British pound.

PSA is partway through a plan to increase revenues by 10 per cent by 2018 compared to 2015 levels as part of a turnaround strategy put in place by chief executive Carlos Tavares, who has pulled the company back from the brink of collapse after joining in 2014.

In the first quarter of this year, its vehicle sales rose 4.2 per cent to 729,424 as growth in the Middle East and Africa – partly from reopening sales in Iran – offset a 45 per cent slide in China and South East Asia.

In Europe, which accounts for two thirds of its business, sales rose from 464,904 to 465,312.

PSA is in the process of taking over Opel, the loss-making arm of General Motors in Europe that includes the Vauxhall brand in the UK. While the takeover will increase its exposure to Europe in the short term, the French group is likely to export Opel’s vehicles outside of Europe as soon as the products move over to PSA’s IP – a move that could see it selling the models directly against GM’s Buick brand in China or the US.

Earlier this month the French prosecutor’s office opened a formal investigation into suspected diesel emissions cheating by PSA.

Peugeot has denied any wrongdoing and said it follows the law in all the countries where it operates.

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