PSA Peugeot Citroen, Europe’s second biggest car maker, has issued its third profit warning of the last year. It said earnings in the first-half took a major hit from higher-than-expected raw materials prices. But thanks to new models, such as the fast-selling Peugeot 207, it is forecasting improved sales in western Europe in the second half of the year.
In the first six months, PSA Peugeot Citroen sold 1.23 million vehicles in the region. Its market share – at 14 per cent – was unchanged from the back half of last year. The operating margin was below target at 691 million euros.
A 600 million euro cost-cutting programme is underway, including closing the company’s British manufacturing base at Ryton in central England by next year with the loss of 2,300 jobs. Further cuts are expected to be announced in September. The latest disappointing numbers hit the share price which finished the day 10.9%.
The company has put on hold a plan to buy back shares until its financial position returns to what it calls a satisfactory level.