Facing falling sales in Europe, French carmaker PSA Peugeot-Citroen has unveiled plans to cut costs by 125 million euros in the second half of this year. With disappointing sales of new models, like its 1007, Europe’s second-largest motor manufacturer has missed its profit targets three times in the past year.
The company has blamed rising raw materials costs, weak European sales and fierce competition. Chief Executive Jean-Martin Folz is due to retire at the end of the year and this is his last attempt to turn the company around. Peugeot will freeze hiring and cut its European workforce by 7%, 10,000 jobs will go, partly by not replacing people who leave or retire. It will reduce its investment and development spending by 20%. Among the cuts already announced is the closure of a factory at Ryton in central England.