PSA Group sees European market down 5% this year, cut jobs image

In 2012, the Europe 30 market should contract by 5 percent and by 10 percent in France, French carmaker Peugeot Citroen said Wednesday.

Outside of Europe, the Group is anticipating growth of c. 7% in China, 6% in Latin America and 5% in Russia.

The car maker gave no forecast for its 2012 earnings, but said Wednesday it expects market conditions “to remain difficult in Europe,” where the group makes over half of its total vehicle sales.

The downbeat forecast came as the maker of the popular Peugeot 207 hatchback and Citroen C4 Picasso minivan reported that its automotive division made a euro439 million ($578 million) loss at the operating level last year, as restructuring costs more than offset slightly higher revenue.

Peugeot’s deliveries fell 1.5 percent to 3.5 million vehicles in 2011. The decline was led by a drop in Europe, where industry figures show Germany was the only country to expand among the region’s top five car markets.

In October, the French giant announced plans to eliminate as many as 3,500 jobs in the region.
PSA’s management said it would try to restore the automotive division’s competitiveness and profitability by implementing an €800 million (US$1.13 billion) cost-savings plan in 2012, which will reduce purchasing costs by €400 million and fixed costs by another €400 million.

PSA’s management said it would try to restore the automotive division’s competitiveness and profitability by implementing an €800 million (US$1.13 billion) cost-savings plan in 2012, which will reduce purchasing costs by €400 million and fixed costs by another €400 million.