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Paris - Peugeot Citroen said on Tuesday it expects to make an operating loss this year of between €1bn and €2bn as it continues to suffer from the severe contraction in the global automobile industry.
France's biggest carmaker said on Tuesday that customers are buying fewer and cheaper cars, while it is having to spend heavily on promotions to keep up its market share for both the Peugeot and Citroen brands.
Earlier this year the Paris-based company announced a net loss of €343m in 2008 compared with a net profit of €885m a year earlier and said it expects to make another loss this year.
The carmaker also has plans to cut 11 000 jobs this year, after losing 18 000 jobs - about 10% of the work force - since the start of its turnaround plan two years ago.
In its statement on Tuesday, Peugeot Citroen said its current forecast is for a decline of the European car market of about 12% in unit sales, not as bad as its last forecast of a 20% contraction.
At the same time, "the market segment mix is however shifting sharply to smaller models which generally have smaller margins, and where promotional activity has become more aggressive," Peugeot Citroen said.
- AP
