Peugeot maker PSA Group has today posted a 0.8% decline in its third-quarter sales, though revenue from its core autos division returned to growth after slumping during coronavirus lockdowns. 

The turnaround comes ahead of PSA's merger with Fiat Chrysler, due to close early next year.

But a resurgence in the Covid-19 pandemic could lead to fresh restrictions on movements and stores in Europe before then. 

Under CEO Carlos Tavares, PSA has focused increasingly on its more expensive and profitable models, helping it ride out falls in sales volumes. 

PSA reported overall sales at €15.5 billion for the three months from July to September, down 0.8% from a year earlier. Automotive revenue rose 1.2% to €12 billion, after ending the first half of the year down 35.5%. 

Car sales volumes fell, even as dealerships re-opened after lockdown measures eased, but this was offset by the popularity of higher priced cars.

PSA had said over the summer that new versions of its Peugeot 208 model and Opel's Corsa were boosting its order books, and its focus on SUV-style cars has also helped. 

PSA kept its target to reach an adjusted operating margin for its automotive division of more than 4.5% for 2019-2021, and said it would likely generate positive cash flow this year. 

The group's $38 billion merger with FCA, set to create the world's fourth largest carmaker under the name "Stellantis", is due to close in the first quarter of 2021. 

They are set to win competition approval for the merger from the European Commission, sources told Reuters this week.

The companies said today they had pressed on with one more step in the process, after their boards agreed PSA could sell up to a 7% stake in car parts maker Faurecia. 

The proceeds will be distributed to Stellantis shareholders in cash, alongside a distribution-in-kind of the remaining Faurecia stake - a structure aimed at preventing Stellantis from gaining control of Faurecia.