PSA Peugeot Citroen vowed to avoid further asset sales or government bailouts, insisting that cuts underway will be enough for it to recover from its biggest-ever full-year loss.
Peugeot shares rose yesterday after the troubled carmaker said it burned through cash at the expected rate in 2012 and stuck by a pledge to halve that figure this year, despite weakening prospects for a European market recovery.
“The foundations for our rebound have been laid,” chief executive Philippe Varin told reporters in Paris, citing savings that were slightly ahead of plan.
Peugeot is the worst casualty of a European auto sales collapse that has been especially brutal in its core southern markets. The company’s share of regional sales fell to 11.7 per cent last year from 12.4 per cent, as rivals such as Volkswagen and Hyundai-Kia gained ground.
The Paris-based company is scrapping 8,000 jobs and an assembly plant in an attempt to return to break-even late in 2014 and profitability in the following full year.
The company yesterday unveiled a €5bn (£4.3bn) net loss, bloated by €4.74bn in writedowns as its industrial operations continue to bleed cash.
Losses at the auto division swelled to €1.5bn from €92m as group revenue fell 5.2 per cent to €58.4bn. Divisional cashflow came to a negative €2.5bn, for a €208m monthly average.
The earnings slide has fuelled speculation that chief executive officer Varin may be forced to consider selling the Faurecia parts division or seek a further cash injection – which could involve Peugeot become partly state-owned, like rival Renault.
City A.M. Reporter