Peugeot Citroen losses mount in H1

PARIS (AP) — PSA Peugeot Citroen says its losses mounted in the first half as Europe’s recession ate into car sales just as it attempts to battle back from last year’s record 5 billion euros ($6.6 billion) loss.

The maker of Peugeot and Citroen sedans, hatchbacks and light trucks says it lost 426 million euros in the first half amid a continued slide in car sales and disruption at a key car plant near Paris where workers went on strike over the group’s plans to shut factories and shed up to 8,000 jobs.

In a statement Wednesday Peugeot Citroen boss Philippe Varin said he “sees the first signs of the group’s recovery,” with the automotive division trimming its operating loss even as sales continue to shrink.

Investors were encouraged by the progress Peugeot had made in controlling costs with shares in the company up 6.5 percent at 9.59 euros in morning trading.

News of Peugeot Citroen’s continuing push to contain losses comes a day after European authorities OK’d the French government’s 572 million euros aid package meant to prop up the troubled automaker.

The European Union Commission’s competition regulator said Tuesday that the plan will help return Peugeot to profitability while keeping damage to competitors who aren’t receiving government money to a minimum.

Peugeot Citroen is being forced to sell assets to help fund a restructuring program that will see the company cut 8,000 jobs and close its Aulnay-sous-Bois plant as it struggles to compete in Europe’s morose car market.

While unions and the government have called the plan unacceptable, the plant looks likely to shut next year. In May workers at the plant ended a four-month walkout.

Earlier this month, the European automakers’ association ACEA said the car industry had its worst June in 17 years, with demand falling 5.6 percent from a year earlier to 1.1134 million cars. Over the entire first half Europe’s car sales sank 6.6 percent.

Peugeot Citroen forecasts the European market to shrink by 5 percent this year.

WKBN 27 First News provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Commenters who violate these terms, including use of vulgar language or racial slurs, will be banned. No links will be permitted. Please be respectful of the opinions of others. If you see an inappropriate comment, please flag it for our moderators to review.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s