Peugeot delivery drip triggered by Eurozone woes

City A.M. Reporter
Peugeot Citroen, the struggling French car maker preparing a new round of cuts likely to include a plant closure, said first-half deliveries tumbled 13 per cent as Europe's austerity drive hit demand.

Shares in Europe's second-largest automaker fell on Friday after it reported global sales declined to 1.62m light vehicles in the first six months from 1.86m in the year-earlier period.

"The Peugeot and Citroen brands' traditionally strong markets, France, Spain and Italy, are in profound crisis," the company said, referring to a plunge in demand in markets where government's are battling to rein in their deficits.

European sales dropped 15 per cent, it said.

Paris-based Peugeot is preparing to unveil cuts expected to include thousands of job losses and closure of its Aulnay plant near Paris, in addition to measures announced earlier this year under a 1 billion euro (£772m) savings programme.

Chief Executive Philippe Varin is scheduled to brief staff representatives on the cuts at a works council meeting next week, ahead of the company's first-half results presentation on 25 July.

Peugeot shares fell as much as 6.4 per cent, leading the 15-member Stoxx Europe autos and parts index lower.

Investors were also unsettled by a report in French weekly La Tribune that the firm was seeking an emergency loan from the government. Peugeot dismissed the report.

"PSA and Philippe Varin deny having asked for a loan from the state," spokesman Pierre-Olivier Salmon said.