PSA Peugeot Citroen Posts Writedown of 4.13 Billion Euro image

Recently PSA Peugeot Citroen reported second-half writedown of 4.13 billion euro ($5.53 billion)due to the plunging auto sales amid the European crisis.

Last year auto sales in Europe dropped to the lowest level over the past 19 years and analysts predict a further fall for this year. Peugeot saw its sales drop 13% last year and for 2013 it expects a further 5% drop. The French government is aware that the last solution to save the automaker would be to take a stake in Peugeot.

“The only thing I can tell you, and I can’t say whether it’s true or false, is that it’s possible because there’s the Strategic Investment Fund,” said French Budget Minister Jerome Cahuzac in the interview. “If the FSI enters into the capital of this company, it’s in fact the state one way or another that’s entering.”

As of 9:28 a.m. in Paris, Peugeot shares increased 26 cents (4.3%) to 6.13 euro. In 2012 the stock has dropped 55% valuing Peugeot at 2.18 billion euro. The automaker is writing down the automotive division’s plants, property and other assets, all valued at 14.5 billion euro at the end of June.