Peugeot Expects Auto Market in Europe to Stabilize at Low Level image

PSA Peugeot Citroen said that demand for new vehicle in Europe has begun to stabilize after deliveries increased last month for the first time in the past 19 months.

Maxime Picat, head of the manufacturer’s Peugeot brand, that competition in Europe becomes tougher as more automakers are offering big incentives. In April auto sales increased for the first time since September 2011, a promising sign that industry might begin to rebound. Still, Peugeot predicts that auto sales in Europe will drop 5% this year, the sixth consecutive year of decline.

In February, Peugeot Citroen CEO Philippe Varin said that the automaker is on its way to return to profit thanks to spending cuts, Peugeot’s upscale shift and the partnership with GM. Peugeot’s vehicles will be upgraded to differentiate them more for Citroen’s models. Peugeot relies on the new models, such as the 208 small car, the 2008 SUV and the upcoming 308, to boost sales.

Last week Peugeot’s workers at the Aulnay plant accepted to end the 4-month strike held for the plant’s closure. The strike involved 130 workers out of the plant’s 2,500 employees. PSA will lay off 8,000 workers in France and close the Aulnay plant, near Paris, part of its restructuring plan.

Source: Bloomberg