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PSA Peugeot Citroën has defended its recovery plan at the same time that it announced its biggest-ever full-year loss.
The French carmaker vowed to avoid further sales of asset or government bailouts and insisted that the cuts it is making will be enough for it to recover.
Chief Executive Philippe Varin insisted it had laid the foundations for a rebound: “The group has today announced bad results for the year 2012, which was an extremely difficult year, not only for the group but for the whole automotive sector in Europe. Now, as I have indicated, we have financial security, which has been improved over the past year by everything we did in 2012. Moreover, I can confirm that in 2014 we will be back to break-even point.”
The company unveiled a five billion euro net loss, but 4.7 billion of that was because of writedowns of assets to reflect their true worth.
The French government talked up the country’s top carmaker with the Finance Minister Pierre Moscovici saying: “It’s started its recovery. That’s what I think. I am really, really convinced that it has a future in Europe and that PSA Peugeot Citroën has unique characteristics and qualities.”
But industry analysts are downbeat.
While Peugeot’s earnings were “a little better than we had forecast”, Credit Suisse analyst David Arnold said in a note, doubts remain about a recovery plan which is “built around a stable market at the 2012 level and a 13 percent market share for PSA … Both look unlikely now.”
The company itself remains gloomy predicting European demand for vehicles is likely to fall a further three to five percent this year and stay depressed for the foreseeable future.