Moody’s places Peugeot’s Baa3/P-3 ratings on review for possible downgrade, Reuters said Wednesday. Moody’s said it expected light vehicle sales in Europe to shrink 6 percent in 2012.
The announcement comes shortly after PSA – Peugeot Citroen said Wednesday that its automotive division made a €439 million ($578 million) loss at the operating level last year, as restructuring costs more than offset slightly higher revenue.
Peugeot’s net debt at its automotive business nearly tripled to EUR3.36 billion at end-2011 from EUR1.24 billion a year before as it burned through EUR1.65 billion in cash during the year.
In addition, the French giant forecast the European car market will shrink about 5 percent this year, after a 0.5 percent drop in 2011.